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
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Ceapro Inc.
CEAPRO INC.
Consolidated Balance Sheets
June 30 December 31
2007 2006
(Unaudited) (Audited)
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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
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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
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$5,346,007 $2,062,846
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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
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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
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2,831,226 1,759,047
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SHAREHOLDERS' EQUITY
SHARE CAPITAL 4,889,000 2,508,059
CONTRIBUTED SURPLUS 217,424 128,478
DEFICIT (2,591,643) (2,332,738)
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2,514,781 303,799
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$5,346,007 $2,062,846
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CEAPRO INC.
Consolidated Statements of Net (Loss) Income and Deficit
Unaudited
Six Months Quarters Ended
Ended June 30 June 30
2007 2006 2007 2006
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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
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Gross margin 1,168,746 1,075,442 617,255 613,356
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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
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1,060,981 941,978 608,832 498,825
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Income (loss)
from operations 107,765 133,464 8,423 114,531
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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)
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(366,670) (188,178) (245,632) (117,959)
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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)
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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)
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Deficit, end of period $(2,591,643) $(2,115,095) $(2,591,643) $(2,115,095)
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Net (loss) income
per share:
Basic $(0.01) $(0.00) $(0.01) $(0.00)
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Diluted $(0.01) $(0.00) $(0.01) $(0.00)
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CEAPRO INC.
Consolidated Statements of Cash Flows
Unaudited
Six Months Quarters Ended
Ended June 30 June 30
2007 2006 2007 2006
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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
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(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)
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(95,637) 532,908 (44,262) 288,601
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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 -
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(699,123) (20,074) (627,453) (9,626)
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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)
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2,978,576 2,555 2,985,973 (83,797)
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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
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Cash and cash
equivalents at
end of period $2,494,742 $953,434 $2,494,742 $953,434
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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