Ceapro Reports 2010 Second Quarter Financial and Operating Results
EDMONTON, ALBERTA -- (MARKET WIRE) -- 08/05/10 -- Ceapro Inc. (TSX VENTURE: CZO) today reported financial results and operating results as at and for the three-month and six-month periods ended June 30, 2010.
Second Quarter highlights
-- Completion of a license and distribution agreement with Oat Cosmetics
for the sale of Ceapro's "All Natural" active ingredients in the United
Kingdom.
-- Announcement of a Research Collaboration with the National Research
Council of Canada (NRC). Research studies to be conducted at the NRC
Institute for Nutrisciences and Health (INH) located in Charlottetown,
Prince Edward Island. Press conference held with Federal Ministers of
Science and Technology and Fisheries and Oceans, Honourable Gary
Goodyear and Gail Shea respectively. Also in attendance was the
Provincial (PEI) Minister of Environment, Energy and Forestry, the
Honourable George Webster.
-- Initiation of development of new formulations and testing for Ceapro's
second generation products with all natural preservative.
Subsequent to Quarter-End
-- Ceapro reduces debt $270,500 as royalty holders elect to exchange
royalty debt for equity.
-- Ceapro receives approval from TSX-V to issue 271,752 common shares to
pay interest on convertible debentures due at June 30, 2010
-- Government of Alberta provides Ceapro with a grant of $124,000 to
conduct a two year research project using University of Alberta
technology to optimize extraction of Ceapro's active ingredients.
Financial results as at and for the three-month periods ended June 30, 2010
-- Sales were $1,018,000 for the three-month period ended June 2010
compared to $1,212,000 for the same period in 2009.This 16% decrease is
primarily due to the absence of sales to the animal health sector and a
lower US dollar exchange rate versus the Canadian dollar. Sales of
active ingredients to the personal care industry increased in volume by
6% following increased shipments of newly launched lupin peptides to be
used in a new hair care line.
-- Research and Development investments amounted to $143,000 for the three-
month period ended June 30, 2010. This is similar to the R&D Investments
for the same period in 2009. It is expected that R&D investments will
increase during the second half of 2010 due to the initiation of three
new projects that will allow Ceapro to get new data to further support
health benefits claims for its products.
-- General and Administration expenses amounted to $323,000 for the three-
month period ended June 30, 2010 compared to $417,000 for the same
period in 2009. This 23% decrease reflects the Company's effort to
reduce expenditures and focus on core areas of the business.
-- Income from Operations was $52,000 for the three-month period ended June
30, 2010 compared to $216,000 for the same period in 2009.The absence of
sales to the animal health sector is primarily responsible for this
decrease.
-- Net Income amounted to $237,000 for the three-month period ending June
30, 2010 compared to $466,000 for the same period in 2009. Net income
includes the recovery of $315,000 for legal fees as at June 30, 2010.
Legal fee recoveries of $426,000 were also recorded as a recovery in the
second quarter of 2009.
"Results obtained so far in 2010 are in line with our expectations during this period of economic recovery in the personal care industry. While we are pleased with these results, we are excited that Ceapro is now in a position to invest in Research and Development in partnership with both Federal and Provincial Governments and other research institutions. This recognition will allow Ceapro to develop new products and rejuvenate some existing ones with new data to support Ceapro's marketing and sales strategy." stated Gilles Gagnon, Acting President and CEO.
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.
CEAPRO INC.
Consolidated Statements of Net Income, Comprehensive Income and Deficit
Unaudited
Six Months Quarters
Ended June Ended June
30 30
2010 2009 2010 2009
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Revenue
Sales $ 2,173,343 $ 2,713,927 $ 1,018,481 $ 1,212,018
Cost of goods sold 1,250,046 1,097,814 557,928 446,775
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Gross margin 923,297 1,616,113 460,553 765,243
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Expenses
General and
administration 613,602 807,516 322,929 417,194
Royalties 25,956 214,458 12,762 76,431
Sales and marketing 39,116 85,063 17,947 24,761
Amortization 16,891 20,809 8,363 11,511
Write off of
property plant and
equipment 10,490 - 10,490 -
Interest on
convertible
debentures 21,096 - 11,071 -
Accretion on
convertible
debentures 15,000 - 7,500 -
Interest on long-
term debt 35,831 38,794 17,687 18,880
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777,982 1,166,640 408,749 548,777
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Income from operations 145,315 449,473 51,804 216,466
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Other income
(expenses)
Research and product
development (282,098) (281,195) (143,970) (145,624)
Other income
(expenses) 10,376 (25,870) 14,591 (31,210)
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(271,722) (307,065) (129,379) (176,834)
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Comprehensive income
(loss) before SGGF
legal fees recovery
(expense) and income
taxes (126,407) 142,408 (77,575) 39,632
SGGF legal fees
recovery 314,983 426,300 314,983 426,300
Income taxes
Current 59,000 241,000 37,000 184,000
Reduction as a
result of applying
non-capital losses
carried forward
against the current
period's taxable
income
(59,000) (241,000) (37,000) (184,000)
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NET INCOME AND
COMPREHENSIVE INCOME
FOR THE PERIOD 188,576 568,708 237,408 465,932
Deficit, beginning of
period (7,390,890) (7,321,541) (7,439,722) (7,218,765)
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Deficit, end of period$ (7,202,314)$ (6,752,833)$ (7,202,314)$ (6,752,833)
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Net income per share:
Basic $ 0.00 $ 0.01 $ 0.00 $ 0.01
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Diluted $ 0.00 $ 0.01 $ 0.00 $ 0.01
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See accompanying notes
Contacts: Branko Jankovic Chief Financial Officer 780-917-8376 bjankovic@ceapro.com www.ceapro.com
Released August 5, 2010