Ceapro Reports Second Quarter 2011 Financial Results

EDMONTON, ALBERTA -- (MARKET WIRE) -- 08/10/11 -- Ceapro Inc. (TSX VENTURE: CZO)("Ceapro" or the Company") today announced its financial results as at and for the three-month and the six-month periods ended June 30, 2011. These results are presented in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB).


--  For Q2 2011 as compared to Q2 2010:
    Revenues increase of 16% from $1,018,000 in 2010 to $1,185,000 in 2011.
    Gross Margin increase of 69% from $463,000 in 2010 to $781,000 in 2011.
    Net income of $105,000 in 2011 compared to $239,000 in 2010 which
    included a non-recurring cost recovery of $315,000 in 2010

--  Non-repayable grant of up to $100,000 obtained from Innovation PEI for
    the development of rosehips extracts in collaboration with the National
    Research Council of Canada

--  Payment of $378,000 to royalty holders

--  Initiation of two new studies with the National Research Council to
    assess the efficacy of certain Ceapro products and follow up studies
    based on data generated in 2010 and to perform synergistic studies by
    combining Ceapro products with new rosehip extracts.

--  Ongoing development of dry beta glucan project for a potential
    commercial scale up by year end 2011

--  Agreement with a major customer for prepaid orders until April 1, 2013
    provides additional liquidity.


--  Completion of new website with launch expected the week of August 8,

"The second quarter of 2011 represents another excellent quarter for Ceapro showing continued profitability and improvement in our balance sheet" said Gilles Gagnon, Acting CEO." These solid results were obtained through improved efficiencies by our highly qualified team and the strong support from our partners and particularly from our major customers who clearly recognize our capacity to develop and sell innovative products and technologies. We now look forward increasing our sales and expanding our pipeline through increased investments in R&D activities along with existing and new upcoming partners in 2011" he added.


--  Revenue. The sales of active ingredients to the personal care industry
    increased by 16% or $167,000 in the second quarter of 2011 due primarily
    to significantly higher sales volumes of Beta Glucan. For the first six
    months, sales rose by $546,000 representing an increase of 25% compared
    to the same period in 2010.

--  Cost of Goods Sold. Cost of Goods Sold decreased by 27% or $$151,000 in
    Q 2, 2011 versus Q2, 2010. As a percentage of revenue, the cost of goods
    sold decreased by 21% from 55% in Q2, 2010 to 34% in Q2, 2011. For the
    six months ended on June 30, 2011, the cost of goods fell by 18% from
    1,246,000 in 2010 to $1,017,000 in 2011.

--  Gross margin. As a percentage of revenues, gross margin in Q2, 2011 was
    at 66% compared to 45% in Q2, 2010 representing a significant
    improvement of 21% in Q2, 2011. For the first six months of 2011, gross
    margin was at 63% of revenues compared to 43% for the same period in
    2010; an improvement of 20%. In absolute numbers, gross margin increased
    by $318,000 in Q2, 2011 versus Q2, 2010 and by $775,000 for the first
    six months of 2011 compared to the same period in 2010.The improvement
    in the amount of gross margin and the gross margin percentage are due to
    the mix of product sales which featured high sales volumes of high
    margin products as well as to production efficiencies and to the
    acquisition of high grade raw materials resulting in a significant yield

--  Research and development. Investments increased by 61% ($87,000)in Q2,
    2011 compared to Q2, 2010 as a result of new research and development
    projects initiated in 2010 and continued throughout 2011 and higher
    costs for patents. For the first six months of 2011, R&D investments
    increased by 50% or $139,000 compared to the same period in 2010. This
    reflects our commitment to expand our pipeline and manufacturing

--  General and Administration. Costs increased by $36,000 in Q2, 2011
    versus Q2, 2010 and by $44,000 for the first six months of 2011 compared
    to the same period last year. These additional costs are primarily due
    to increased consulting fees for the implementation of IFRS new
    accounting rules and some modest increases in salary and wage cost

--  Sales and Marketing. Expenses increased by $16,000 in Q2, 2011 compared
    to Q2, 2010 and by $25,000 for the first six months of 2011 compared to
    the same period in 2010. These increases result from assessment of new
    marketing initiatives and attendance at major personal care and cosmetic

--  Net income. For Q2, 2011, net income was $105,000 versus $239,000 in Q2,
    2010. Of note, net income in Q2, 2010 included the recovery of a non-
    recurring cost of $315,000. Net income for the first six months of 2011
    amount to $430,000 compared to $192,000 for the same period in 2010
    which included the recovery of $315,000. Excluding the effects of the
    non-recurring cost recovery in 2010, net income increased by $182,000
    for Q2 2011 versus Q2 2010 and $554,000 for the first six months of 2011
    versus 2010.

The complete audited annual report and financial statements are available for review on SEDAR at http://sedar.com/Ceapro and on the Company's website at www.ceapro.com.

About Ceapro Inc.

Ceapro Inc. is a Canadian growth-stage biotechnology company. Primary business activities relate to the development and commercialization of active ingredients for personal care and cosmetic industries using proprietary technology and natural, renewable resources. To learn more about Ceapro, visit www.ceapro.com.

Consolidated Statements of Net Income and Comprehensive Income
                        Six Months Ended June 30,   Quarters Ended June 30,
                                2011         2010         2011         2010
                                   $            $            $            $

Revenue (note 18)          2,719,083    2,173,343    1,185,489    1,018,481

Cost of goods sold         1,017,067    1,245,895      404,819      555,853

Gross margin               1,702,016      927,448      780,670      462,628

Research and product
 development                 415,674      277,398      228,399      141,685

General and
 administration              669,256      625,094      364,745      329,179

Sales and marketing           64,110       39,116       34,082       17,947

Other operating (income)
 loss (note 13)               24,097      (10,353)       1,034      (13,521)

Write off of property
 and equipment                     -       10,490            -       10,490

Income (loss) from
 operations                  528,879      (14,297)     152,410      (23,152)

Finance costs (note 14)      (98,404)    (108,536)     (47,124)     (53,224)

SGGF legal fees (note
 16)                               -      314,983            -      314,983

Income before tax            430,475      192,150      105,286      238,607

Income taxes
 Current                     192,000       59,000       75,000       37,000
 Reduction as a result
  of applying non-
  capital losses carried
  forward against the
  current period's
  taxable income            (192,000)     (59,000)     (75,000)     (37,000)

Net income and
 comprehensive income
 for the period              430,475      192,150      105,286      238,607

Net income per common
 Basic                          0.01         0.00         0.00         0.00

 Diluted                        0.01         0.00         0.00         0.00

Weighted average number
 of common shares
 outstanding              56,543,790   51,710,063   56,578,948   51,710,063

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.

Branko Jankovic
Vice President and CFO
Ceapro Inc.
(Edmonton): 780.917.8376

Source: Ceapro Inc.