Dr. John Faessel's  Instablog

Dr. John Faessel
Send Message
Dr. John L. Faessel is a seasoned and respected Wall Street professional with industry-wide recognition for expertise in market strategy and analysis. He is widely recognized for his insights in public companies. For over 20-years Dr. Faessel’s ON THE MARKET reports have been widely distributed... More
  • A Best Idea Update - GlyEco - (GLYE) - Re Hurricane Sandy Storm Impact – Plus… 1 comment
    Nov 14, 2012 3:15 PM


    Dr. John L. Faessel


    Commentary and Insights

    A Best Idea Update:

    Re Hurricane Sandy Storm Impact - Plus…

    GlyEco - GLYE.OB

    Good News for GlyEco (OTCPK:GLYE) - Superstorm Sandy flooded the New Jersey plant that the company is finalizing the purchase / acquisition of this month, but miraculously no real damage was sustained. Now the following nor'easter has just passed thru leaving snow to attend to on its march to New England. It's unlikely that this will have much of any impact on operations.

    More Detail on the Full Circle Deal

    I believe that the asset purchase of New Jersey company is scheduled to close shortly and the company is expecting to produce Type 1* material on schedule in Q1 2013. To repeat; from what I understand, everything is on schedule at this point.

    Central to note is that the New Jersey company is the largest glycol recycler in the USA and produces revenue of around $4 million.

    So with the new funding I believe the closing on this accretive deal is imminent. (On October 19, 2012, (OTCPK:GLYE) completed an offering - total proceeds from the Offering were $3,390,000.)

    The location and shipping capabilities of the New Jersey facility positions it to take in very large quantities of non-antifreeze waste 'feedstock'. It is already one of the highest capacity glycol recycling facilities in the world, and the technology roll-out plan doubles that capacity - to over 20 Million gallons per year. My analysis indicates that (OTCPK:GLYE) reaches the break-even point at about 1 million gallons. Hence the profit outlook should be exceptional.

    The Ultra Quick Story

    Glycol right out of the refinery costs about $5.60 a gallon and the world uses 5 billion gallons ($25 billion a year plus) a year to make, polyester fibers, antifreeze, plastic bottles and containers etc… To make all this stuff about 20% goes to waste and is currently disposed of with miniscule recovery. To acquire the hazardous waste it costs about zip and in some cases you can be paid to pick it up. Now, by using (OTCPK:GLYE)'s breakthrough and disruptive technology, Type 1* (virgin) glycol can be produced from the former waste. The 'brand new' glycol can then be sold immediately to a hungry global market at market prices roughly $5.60 a gallon. It's essentially a business that goes on recession or no. Business models don't get much better than this.

    Going Forward - A Disruptive Technology

    While (OTCPK:GLYE) is operational with the accretive and closed deals already in production of recycled anti-freeze grade Type 2 glycol, the New Jersey operation sets in motion a 'new' and disruptive breakthrough technology into a hungry marketplace.

    The New Jersey facility will be the world's first operation producing Type 1 glycol. And the New Jersey deal is the cornerstone of their strategy for introducing their patent-pending GlyEco Technology™ (producing Type 1* material) into the market; and the first technology to clean all types of waste glycol.

    Storied Management

    Key to GlyEco's acquisition strategy is that it's being orchestrated by Waste Management's creator John Lorenz, GlyEco's CEO. Certainly previous experience is not a guarantee of future success, however investing alongside Lorenz, , who has 35-years of experience, coupled with a strong track record provides better leadership and knowhow than a person who has no experience at all. Waste Management (NYSE:WM) grew in seven years from $2 million in revenues to $14 billion through a series of acquisitions of smaller cartage / garbage / waste companies.

    Recent News Flow & SEC Filings

    The recent news flow is full of validation and paints the picture of management's ability to execute on their plan. Multiple 'closings' of the accretive deals that were first announced earlier this year have been filed with the SEC and press releases have been generated. Add the just announced funding and it sets-up the ability to continue their move forward on all fronts.

    * More about Glycol

    (OTCPK:GLYE)'s green chemistry solution to "re"- produce refinery grade glycol (ASTM E1177A Type 1 compliant) has been in development for several years. Management is planning to upgrade the acquired plants with the new GlyEco Technology to improve efficiency and increase profitability.

    For the complete (OTCPK:GLYE) story, Link to my recent Seeking Alpha article …


    For more information, visit the (OTCPK:GLYE) website: http://www.glyeco.com/

    Disclosure: I am long GLYE. I purchased shares on the open market and will likely buy more.

Back To Dr. John Faessel's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • adxsgoinghigher
    , contributor
    Comments (60) | Send Message
    check out the video on GLYE at 13.33 minutes


    2 Jan 2013, 10:02 AM Reply Like
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.