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).
SECOND QUARTER 2011 HIGHLIGHTS
-- 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.
SUBSEQUENT TO QUARTER END
-- Completion of new website with launch expected the week of August 8,
2011
"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.
FINANCIAL RESULTS FOR THE SECOND QUARTER AND THE FIRST SIX MONTHS ENDED JUNE 30, 2011
-- 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
increase.
-- 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
technologies.
-- 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
conferences.
-- 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.
CEAPRO INC.
Consolidated Statements of Net Income and Comprehensive Income
Unaudited
Six Months Ended June 30, Quarters Ended June 30,
2011 2010 2011 2010
$ $ $ $
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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
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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
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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
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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)
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Net income and
comprehensive income
for the period 430,475 192,150 105,286 238,607
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Net income per common
share:
Basic 0.01 0.00 0.00 0.00
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Diluted 0.01 0.00 0.00 0.00
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Weighted average number
of common shares
outstanding 56,543,790 51,710,063 56,578,948 51,710,063
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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.
Contacts: Branko Jankovic Vice President and CFO Ceapro Inc. (Edmonton): 780.917.8376 bjankovic@ceapro.com
Source: Ceapro Inc.
Released August 10, 2011