CVF Technologies Corporation's (OTC Bulletin Board: CNVT) holding BIOREM (approximately 27% owned by CVF) announced today its results for the fourth quarter and the year ended December 31, 2005, which are summarized in the following table:
Information in table is in Quarter Quarter Year Year
thousands (Cdn) except Ended Ended to Date to Date
per share data Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2005 2004
REVENUE $3,348 $2,010 $10,713 $9,934
EBITDA (1) 398 487 1,144 1,789
NET EARNINGS 92 330 344 972
BASIC EARNINGS PER SHARE 0.01 0.03 0.03 0.11
DILUTED EARNINGS PER SHARE 0.01 0.03 0.03 0.11
WEIGHTED AVERAGE COMMON
SHARES 10,278 9,499 10,183 8,911
The Company established a new record for sales bookings in 2005 of $15.5 million (Cdn) compared to $11.3 million (Cdn) in 2004, which represents a 38% increase over the same period last year. The record bookings contributed to the growth in BIOREM's sales order backlog which increased 92% to $9.4 million as at December 31, 2005 compared to $4.9 million at the end of the previous year. Revenue for the twelve-month period ending December 31, 2005 increased 8% to $10.7 million (Cdn) over the same period in 2004 primarily due to the Company's acquisition of Victor, New York-based Biocube LLC on July 1, 2005.
"Our acquisition of Biocube in July of last year added $2.1 million of sales order bookings, which complemented the additional sales bookings generated primarily in the Municipal market, both of which contributed to the 38% increase in bookings that we experienced in 2005," noted Brian Herner, President and CEO. "Going forward, with the resources that we have committed to building our sales infrastructure, particularly in the US, we anticipate continued growth in bookings leading to increased revenue growth in 2006 and beyond as new market opportunities are identified and captured by our sales team."
Gross profit in 2005 was $4.7 million (Cdn) compared to $4.6 million (Cdn) in 2004, which is a 2% increase. Gross margin was 44% of sales in 2005 which is down from 46% in 2004 due primarily to changes in the Canadian/US exchange rate that occurred between the time orders were accepted and the time the revenue on these orders was recorded. Through 2005 the value of $1.00 US declined 3.3% from $1.20 to $1.16 Canadian. During fiscal 2005 approximately 90% of the Company's revenue was generated in the United States.
Net earnings for the year were $344,000 (Cdn), down $628,000 (Cdn) from the prior year due to $600,000 (Cdn) of incremental operating expenses related to salaries and benefits associated with the Company's investment in additional Sales, R&D, General and Administrative staff as well as $200,000 (Cdn) associated with incremental operating expenses associated with the new US office in Victor, NY.
To reflect the accounting guidance on reverse take over transactions, the 2004 average common shares outstanding were increased by 7,451,843 to reflect the impact of the exchanged common shares as part of a Qualifying Transaction of the Capital Pool Corporation on January 17, 2005. The new equity generated as part of this transaction strengthened the Company's balance sheet and at year end there is no long-term debt outstanding and working capital improved to $3.3 million (Cdn) from $3.1 million (Cdn) in 2004.
The Company also announced today that it has granted options to purchase a total of 40,000 common shares to management and employees in accordance with its stock option plan. The options were granted at an exercise price of $2.75 (Cdn) per share and have an expiry date of five years ending March 15, 2011.
For detailed financial statements for the year, including Management's Discussion and Analysis please refer to BIOREM's web site at http://www.biorem.biz or SEDAR at http://www.sedar.com after April 7, 2006.
BIOREM(R) manufactures BIOSORBENS(TM) biofilter media and is a leading supplier of biofilters for air pollution control in municipal and industrial applications, including the recently acquired BIOCUBE(R) modular units. With over 400 installed systems and over a decade of experience, the Company's biofilters are the technology of choice for odor control at Wastewater Treatment Plants across North America.
CVF Technologies Corporation (http://www.cvfcorp.com) is headquartered in Williamsville, New York. CVF is a technology development company, whose principal business is sourcing, funding and managing emerging pre-public technology companies with significant market potential. Founded in 1989, CVF's holdings include three companies involved primarily in environmental products/services.
(1) 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, 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.
Certain statements made in this press release which are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these statements involve risks and uncertainties, which may cause actual results or achievements to be materially different from any future results and achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, product demand and market acceptance risks for the products and technologies of CVF's subsidiary companies and investees; the impact of competitive products, technologies and pricing; delays or difficulties in developing, producing, testing and selling new products and technologies; the ability of the company's subsidiaries and investees to obtain necessary financing for their operations and to consummate initial public offerings of their stock; the effect of the Company's accounting policies; the effect of trade restrictions and other risks detailed in the company's Statement on Form 10-SB/A filed with the U.S. Securities and Exchange Commission and any subsequent filings with the Commission.
For more information please contact: http://www.cvfcorp.com