Ceapro Growth Continues: First Six Months and Q2 Sales Maintain Operational Profitability
EDMONTON, ALBERTA -- (MARKET WIRE) -- 08/29/07 -- Ceapro Inc. (TSX VENTURE: CZO) is pleased to report steady sales growth during the second quarter of 2007. Revenues reached $1,118,584 during the quarter and $2,080,210 for the first six months of the year. Active ingredients sales amounted to $944,000 and veterinary therapeutic sales were $175,000. Overall margins were 55% during the second quarter of 2007.
"We are pleased with sales to date, the plant is running at full capacity and we are looking forward to the completion of our plant expansion to meet the growing demand for our products," said Dr. Mark Redmond, Ceapro's President and CEO. "The outlook for the remainder of 2007 and beyond is positive as Ceapro moves into the next stage of evolution. We look forward to growing our business both organically and through new activities in joint ventures, mergers and acquisitions."
Highlights For the First Six Months and Q2
- Increased total sales by 13% for the six months' period and 18% Q2 over the same period in 2006;
- Grew active ingredient sales by 14% and 2% over the same periods in 2006;
- Realized operational profitability of $8,000 before R&D expenses and currency exchange losses, as well as gross margins of 55% for the quarter and 56% for the six-month period;
- Expanded manufacturing operations, to increase production capacity, allowing streamlined production of pharmaceutical-grade active ingredients.
Private Placement
Over the course of the quarter, the Company completed its first brokered private placement for total gross proceeds of $2,692,000. The proceeds are being used to increase sales and marketing capabilities, to launch CeaProve®, the Company's diabetes test meal to identify Type 2 diabetes and pre-diabetes, and for general corporate purposes.
Active Ingredients
In May Ceapro announced the development of a line of premium personal care active ingredients based on organically grown and certified extracts. Ceapro Organic(TM) is targeted at high-end, organic markets and captures the health benefits of plants cultivated using 'green' farming practices, an important untapped market for Ceapro. We expect to capitalize on the growing consumer desire for products that are kind to both the skin and the environment.
CeaProve®
The patent allowance for CeaProve® in Canada will permit Ceapro to take commercial advantage of the technology developed over the past several years. Follow-on patent applications are pending which would give Ceapro an exclusive market position on the diabetes test product until 2021.
BioEnergy
During the second quarter work continued on a feasibility study examining construction of an integrated active ingredient and bioenergy plant. Begun in January 2007, the study has identified areas of opportunity using Ceapro's proprietary processing technology, and highlighted potential partners to develop this opportunity.
The complete unaudited quarterly report and financial statements are available for review on SEDAR at: http://www.sedar.com and on the Company's website www.ceapro.com
About Ceapro Inc.
Ceapro Technology Inc., Ceapro Veterinary Products Inc., Ceapro Active Ingredients Inc., and Ceapro Bioenergy Inc. are wholly-owned subsidiaries of Ceapro Inc., which is a Canadian growth-stage biotechnology company. Our primary business activities relate to the development and commercialization of organic products for medical, cosmetic, and animal health industries using proprietary technology and natural, renewable resources. We will apply our technology to participate in the bioenergy sector. We employ our CeaProve® diagnostic technology for health and wellness services.
This release may contain forward-looking statements. Various factors could cause actual results to differ materially from those projected in forward-looking statements. Although the Company believes that the forward-looking statements contained herein are reasonable, it can give no assurance that the Company's expectations are correct. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.
Unaudited Consolidated Financial Statements for the Second Quarter Ended June 30, 2007 --------------------------------------------------------------------------- Ceapro Inc. CEAPRO INC. Consolidated Balance Sheets June 30 December 31 2007 2006 (Unaudited) (Audited) ------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents $2,494,742 $310,926 Accounts receivable 957,964 634,256 Inventories 214,397 160,456 Prepaid expenses and deposits 266,127 178,751 ------------------------------------------------------------------------- 3,933,230 1,284,389 PROPERTY AND EQUIPMENT (NET OF ACCUMULATED AMORTIZATION) 1,221,867 610,629 DEPOSITS ON PROPERTY AND EQUIPMENT 190,910 167,828 ------------------------------------------------------------------------- $5,346,007 $2,062,846 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $888,032 $335,616 Current portion of deferred revenue 92,611 105,000 Callable debt 12,338 36,313 Current portion of long-term debt 74,900 36,609 Currrent portion of royalties payable 174,387 130,456 ------------------------------------------------------------------------- 1,242,268 643,994 DEFERRED ROYALTY REVENUE 339,221 369,764 EMPLOYEE FUTURE BENEFITS OBLIGATION 251,104 219,340 LONG-TERM DEBT 900,768 400,122 ROYALTIES PAYABLE 97,865 125,827 ------------------------------------------------------------------------- 2,831,226 1,759,047 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY SHARE CAPITAL 4,889,000 2,508,059 CONTRIBUTED SURPLUS 217,424 128,478 DEFICIT (2,591,643) (2,332,738) ------------------------------------------------------------------------- 2,514,781 303,799 ------------------------------------------------------------------------- $5,346,007 $2,062,846 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CEAPRO INC. Consolidated Statements of Net (Loss) Income and Deficit Unaudited Six Months Quarters Ended Ended June 30 June 30 2007 2006 2007 2006 -------------------------------------------------------------------------- Revenue Sales $2,080,210 $1,844,242 $1,118,584 $945,043 Cost of goods sold 911,464 768,800 501,329 331,687 -------------------------------------------------------------------------- Gross margin 1,168,746 1,075,442 617,255 613,356 -------------------------------------------------------------------------- Expenses General and administration 584,834 512,386 338,714 276,645 Royalties (net) 196,538 178,840 105,683 89,287 Sales and marketing 192,755 154,282 119,983 84,066 Amortization 64,803 71,962 32,657 36,231 Interest on long- term debt 19,922 20,576 10,291 10,197 Interest on callable debt and other 2,129 3,932 1,504 2,399 -------------------------------------------------------------------------- 1,060,981 941,978 608,832 498,825 -------------------------------------------------------------------------- Income (loss) from operations 107,765 133,464 8,423 114,531 -------------------------------------------------------------------------- Other income (expenses) Research and product development (271,130) (148,734) (169,168) (77,377) Bio-energy feasibility study (45,670) - (22,958) - Other income (expenses) (49,870) (39,444) (53,506) (40,582) -------------------------------------------------------------------------- (366,670) (188,178) (245,632) (117,959) -------------------------------------------------------------------------- Income (Loss) before income taxes (258,905) (54,714) (237,209) (3,428) Income Taxes Current 68,500 84,000 4,000 61,000 Reduction as a result of applying non-capital losses carried forward against the current period's taxable income (68,500) (84,000) (4,000) (61,000) -------------------------------------------------------------------------- NET (LOSS) INCOME FOR THE PERIOD (258,905) (54,714) (237,209) (3,428) Deficit, beginning of period (2,332,738) (2,060,381) (2,354,434) (2,111,667) -------------------------------------------------------------------------- Deficit, end of period $(2,591,643) $(2,115,095) $(2,591,643) $(2,115,095) -------------------------------------------------------------------------- -------------------------------------------------------------------------- Net (loss) income per share: Basic $(0.01) $(0.00) $(0.01) $(0.00) -------------------------------------------------------------------------- -------------------------------------------------------------------------- Diluted $(0.01) $(0.00) $(0.01) $(0.00) -------------------------------------------------------------------------- -------------------------------------------------------------------------- CEAPRO INC. Consolidated Statements of Cash Flows Unaudited Six Months Quarters Ended Ended June 30 June 30 2007 2006 2007 2006 -------------------------------------------------------------------------- Operating Activities Net (loss) income for the period $(258,905) $(54,714) $(237,209) $(3,428) Items not affecting cash Amortization 64,803 71,962 32,657 36,231 Employee future benefits obligation 31,764 28,398 15,498 15,498 Recognition of deferred royalty revenue (23,766) (21,070) (12,780) (10,797) Stock based compensation 22,242 9,113 11,121 4,557 -------------------------------------------------------------------------- (163,862) 33,689 (190,713) 42,061 Changes in Non-Cash Working Capital Items Accounts receivable (323,708) 278,730 21,768 168,594 Inventories (53,941) 38,506 34,345 (6,074) Prepaid expenses and deposits (87,376) 22,659 (132,131) (2,449) Accounts payable and accrued liabilities 552,416 389,000 230,378 201,113 Deferred revenue (19,166) (229,676) (7,909) (114,644) -------------------------------------------------------------------------- (95,637) 532,908 (44,262) 288,601 -------------------------------------------------------------------------- Investing Activities Purchase of property and equipment (676,041) (20,074) (660,156) (9,626) Deposits for the purchase of property and equipment (23,082) - 32,703 - -------------------------------------------------------------------------- (699,123) (20,074) (627,453) (9,626) -------------------------------------------------------------------------- Financing Activities Repayment of long-term debt (17,901) (16,390) (9,048) (8,284) Repayment of callable debt (23,975) (22,200) (12,103) (11,206) Proceeds from long term debt 556,838 - 556,838 - Proceeds from issuance of share capital 2,692,100 - 2,692,100 - Share capital issue costs (277,692) - (277,692) - Proceeds from exercise of stock options 33,237 5,625 33,237 - Increase (decrease) in royalties payable 15,969 35,520 2,641 (64,307) -------------------------------------------------------------------------- 2,978,576 2,555 2,985,973 (83,797) -------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 2,183,816 515,389 2,314,258 195,178 Cash and cash equivalents at beginning of period 310,926 438,045 180,484 758,256 -------------------------------------------------------------------------- Cash and cash equivalents at end of period $2,494,742 $953,434 $2,494,742 $953,434 -------------------------------------------------------------------------- --------------------------------------------------------------------------
The TSX Venture has neither approved nor disapproved of the information contained herein
Contacts: Ceapro Inc. Dr. Mark Redmond President and CEO Edmonton: 780-421-4555 www.ceapro.com Sun International Communications Nicole Blanchard, B.Sc., B.Comm. Managing Partner Montreal: 450-627-6600
Released August 29, 2007