The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Biorem Reports First Quarter

Monday, May 10, 2010

Biorem Reports First Quarter07:00 EDT Monday, May 10, 2010Bookings Up 153% to $5.2 MMGUELPH, ON, May 10 /CNW/ - BIOREM Inc. (TSX-V: BRM) ("Biorem" or "the Company") today announced its results for the three-month period ended March 31, 2010. Biorem's complete fiscal 2010 first quarter financial statements and MD&A have been filed on SEDAR (www.sedar.com)."With the effects of the 2009 economic downturn behind us, our Bookings rebounded to $5.2 million in the first quarter of 2010 and are on track to meet our $18 to $20 million target for the year. Furthermore, our Backlog has increased to $12.1 million," said Peter Bruijns, President and CEO. "We also continued expanding beyond our established leadership position in the odor control market into the growing Renewable Energy (biogas purification) and Volatile Organic Compounds (VOC) industrial sectors. We estimate the combined size of these two markets is $430 million in North America alone. We are well positioned with our proprietary best-in-class emission control systems and anticipate positive financial results for these new markets to occur in 2011."Bookings in the first quarter of 2010 were $5,190,000, up more than 153% from $2,051,000 in the first quarter of 2009, resulting in a current Backlog of $12.1 million, up $2.0 million or 19% from December 31, 2009. << ------------------------------ Three months ended % Change March 31, --------------------------------------------------------------- (in thousands of Canadian dollars, except percent and per share data) 2010 2009 ------------------------------------------------------------------------- REVENUE $3,248 $4,038 -19.6% ------------------------------------------------------------------------- GROSS PROFIT $1,147 $1,306 -12.2% ------------------------------------------------------------------------- GROSS MARGIN 35% 32% 9.4% ------------------------------------------------------------------------- Adjusted EBITDA(1) (excluding gains and losses on foreign exchange) $(485) $(27) -1,696% ------------------------------------------------------------------------- NET LOSS $(892) $(425) -109.9% ------------------------------------------------------------------------- BASIC AND DILUTED LOSS PER SHARE $(0.07) $(0.04) - ------------------------------------------------------------------------- >> THREE MONTHS ENDED MARCH 31, 2010Revenue for the three-month period ended March 31, 2010 (Q1 2010) was $3,248,000, compared to $4,038,000 in the comparative period in the prior year (Q1 2009). Consolidated revenue was down due to the decreased Backlog at the end of 2009, which in turn resulted from the global economic downturn and lower Bookings that occurred in the first half of 2009. Due to the nature of the Company's revenue cycle averaging ap proximately four quarters, these lower Bookings in Q1 2009 affected the revenue for Q1 2010.Gross margin in Q1 2010 was at 35% compared to 32% in Q1 2009. The lower margin in Q1 2010 primarily relates to the under absorption of fixed costs due to lower sales levels. Although this quarter's gross margin is below the Company's 2008 and 2009 rate of 40%, the Company expects the 2010 annual margin to approximate the margins of the prior two years.Gross profit in Q1 2010 was $1,147,000 down slightly from $1,306,000 in Q1 2009.Total operating expenses in Q1 2010 were $1,632,000 compared to $1,332,000 in Q1 2009. The increase was primarily due to higher research and development expenses as the Company continues to advance its next generation of products in the biogas and VOC sectors and a higher commission expense that resulted from the characteristics of the current quarter's revenue contracts.In Q1 2010, Adjusted EBITDA decreased to $(485,000) from $(27,000) in Q1 2009. The decrease was a direct result of lower revenue earned during the quarter, higher sales commissions accrued in Q1 2010 compared to Q1 2009 and increased expenditures in R&D.Net loss for the first quarter of 2010 was $892,000 or $(0.07) per basic and diluted share, compared to net loss of $425,000, or $(0.04) per basic and diluted share in the first quarter of 2009.As at March 31, 2010, the Company had working capital of $6,420,000 including cash and short-term investments of $3,092,000, trade and other receivables of $2,711,000, and unbilled revenue of $4,130,000, compared to total working capital of $7,089,000, cash and short-term investments of $4,031,000, trade and other receivables of $2,898,000, and unbilled revenue of $3,449,000 as at December 31, 2009.About BIOREM Inc.Biorem is a leading clean technology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds (VOCs), and hazardous air pollutants (HAPs). With sales and manufacturing offices across the continent, a dedicated research facility, a worldwide sales representative network and more than 600 installed systems worldwide, Biorem offers state-of-the-art technology-based products and peace of mind for municipalities, industrial companies and their surrounding communities. Additional information on Biorem is available on our website at www.biorem.biz.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Forward-Looking StatementsThis press release contains forward-looking statements based on current expectations. These forward-looking statements contain various risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the disclosure materials, financial statements and MD&A filed with the securities regulatory authorities in Canada on www.sedar.com.Non-GAAP Measures1. EBITDA is a non-GAAP earnings measure, therefore, it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, foreign exchange gains and losses, depreciation and amortization. This measure is important to management since it is used by potential lenders to evaluate the ongoing cash generating capability of the Company and thus the amounts those lenders are willing to lend to the Company."Bookings" and "Backlog" do not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and may not be comparable to measures presented by other companies.Bookings and Backlog are non-GAAP measures that the Company uses to evaluate its sales performance. Bookings are those binding contracts that the Company enters into with a third party for the delivery of our products or services. As Bookings are received, the contract value (before any associated sales taxes) is included in the Backlog. The Backlog is reduced by the revenue that is recognized on each project and then adjusted for any currency changes.%SEDAR: 00020304EFor further information: Ed Corbett, Chief Financial Officer, BIOREM Technologies Inc., ecorbett@biorem.biz, Tel: (519) 767-9100 x275; James Smith, Investor Relations, The Equicom Group Inc., jsmith@equicomgroup.com, Tel: (416) 815-0700 x229