Press release from Marketwire
ORMI Reports Fiscal 2011 Second Quarter Results
Monday, February 14, 2011
ORMI Reports Fiscal 2011 Second Quarter Results08:30 EST Monday, February 14, 2011TORONTO, ONTARIO--(Marketwire - Feb. 14, 2011) - Organic Resource Management Inc. (TSX VENTURE:ORI) ("ORMI" or "the Company"), today announced its financial results for the three and six month periods ended December 31, 2010.Q2 2010 Highlights:Total revenues increased to $3,500,000, up 4% from $3,352,000 for Q2 2010. Gross margin of $1,275,000, down 3% from $1,318,000 for Q2 2010. Net loss of $22,000 compared to net income of $163,000 for Q2 2010. EBITDA of $368,000, down 18% from $448,000 for Q2 2010. Cash flows from operations of $309,000, down 20% from $386,000 for Q2 2010. "We are reinvesting a portion of today's earnings to accelerate the Company's growth and benefit future shareholder value. As a result, there will be a short term reduction of earnings," said Charles Buehler, Chairman and Chief Executive Officer of ORMI. "These are exciting times for the Company. We are now in the position of having lower cost sustainable organic waste recycling with excess capacity at a time when corporations and society in general are increasingly looking for environmentally sound recycling solutions. In order to capitalize on this situation, we are making significant investments in our organization to attract, obtain and keep new business.""During the quarter, we replaced one of our major subcontractors in south-western Ontario with our own facility and fleet of trucks, incurring incremental costs during the transition," continued Mr. Buehler. "We initiated a comprehensive in-laboratory R&D program for testing and analyzing our feedstock and we implemented a process to evaluate the quality of raw organic residuals for prospective large volume customers to determine the viability of long term service contracts. We also implemented a significant upgrade to our enterprise management system that will allow us to add a level of customer service unmatched in our industry." Three months ended December 31: Total revenues were $3,500,000 for the quarter, an increase of $148,000 or 4% from $3,352,000 for the same period last year. The gross margin was $1,275,000, a decrease of $43,000 or 3% from the gross margin of $1,318,000 for the same period last year. Gross margin as a percentage of revenue was 36%, compared to 39% for the same period last year. The decrease in gross margin was mainly due to transitional costs relating to the replacement of the south-western Ontario subcontractor and additional costs relating to the new in-laboratory R&D program and the large customer residuals quality process, noted above.Total operating expense was $1,297,000 for the quarter, an increase of $139,000 or 12% from $1,158,000 for the same period last year. This overall increase was largely due to a $92,000 or 41% increase in amortization expenses, from $227,000 for the quarter last year to $319,000 this year. The net loss was $22,000 for the quarter compared to net income of $163,000 for the same period last year, a decrease of $185,000. EBITDA was $368,000 for the quarter, a decrease of $80,000 or 18% from $448,000 for the same period last year. Cash flows from operations were $309,000, a decrease of $77,000 or 20% from $386,000 for the same period last year. The net loss per share for the quarter was $0.00 compared to net income per share of $0.04 for the same period last year. Six months ended December 31: Total revenues were $7,093,000 for the period, an increase of $311,000 or 5% from $6,782,000 for the same period last year. The gross margin was $2,854,000, an increase of $166,000 or 6% from the gross margin of $2,688,000 for the same period last year. Gross margin as a percentage of revenue was 40%, equal to the same period last year.Total operating expense was $2,656,000 for the period, an increase of $327,000 or 14% from $2,329,000 for the same period last year. In addition to the impact of amortization noted above, insurance, communications and salaries expenses were higher, the latter following the addition of two senior management positions in May 2010, consistent with the Company's growth and long-term corporate strategies.Net income was $198,000 for the period, a decrease of $169,000 or 46% from $367,000 for the same period last year. EBITDA was $934,000 for the quarter, a decrease of $15,000 or 2% from $949,000 for the same period last year. Cash flows from operations were $825,000, a decrease of $13,000 or 2% from $838,000 for the same period last year. The net income per share for the period was $0.04, down from $0.08 for the same period last year. The comparative financial statements for the three and six months ending December 31, 2010 along with other information may be obtained through the Company's website at www.ormi.com, or on SEDAR at www.sedar.com.This press release is available on the Company's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit the investor relations section of the Company's website at www.ormi.com/ir/index.php. Alternatively, investors are asked to e-mail all questions and correspondence to email@example.com where they can also request addition to the Company's investor e-mail list to receive all future press releases and updates directly.About Organic Resource Management Inc. Organic Resource Management is Canada's largest provider of vacuum truck services for the collection, processing and recycling of food-related organic residuals. ORMI services in excess of 10,000 regularly-scheduled grease traps for commercial, industrial and institutional customers across Canada. Further information about ORMI may be obtained at the Company's web site at www.ormi.com. Non-GAAP Measures The Company reports its financial results in accordance with GAAP. However, this press release contains references to certain non-GAAP financial measures such as "EBITDA" and "Cash Flows from Operations". Non-GAAP financial measures are used by management to evaluate the performance of the Company. Non-GAAP financial measures do not have any meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other reporting issuers. Investors are cautioned that non-GAAP measures, such as those presented herein, should not be construed as an alternative to net income determined in accordance with GAAP as indicators of the Company's performance or to cash flows from operating activities as a measure of liquidity and cash flow.EBITDA means earnings before income taxes, interest, share based compensation, amortization, the gain on sale of non-core assets, the write-down of property, plant and equipment, the write-down of intangible assets and goodwill, foreign exchange gains and dividends on preferred shares. Cash Flows from Operations means cash flows from operating activities before changes in non-cash operating assets and liabilities.Forward Looking Statements Certain information contained in this press release may be forward-looking and therefore subject to unknown risks or uncertainties. The actual results, performance or achievements of Organic Resource Management Inc. may differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements.FOR FURTHER INFORMATION PLEASE CONTACT: Charles BuehlerOrganic Resource Management Inc.Chairman and CEO416firstname.lastname@example.orgNeither 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.