| BIOREM REPORTS YEAR END RESULTS |
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Guelph, Ontario (April 12, 2011) – BIOREM Inc. (TSX-V: BRM) (“Biorem” or “the Company”) today announced its results for the three and twelve-month periods ended December 31, 2010. Biorem’s complete fiscal 2010 year-end financial statements and MD&A have been filed on SEDAR (www.sedar.com). “Biorem had anticipated a difficult year financially but continued to proceed with a number of strategic business development investments in addition to reducing our cost structures,” said Peter Bruijns, President & CEO. “During the year we continued to invest in our sales channels, completed the establishment of our Wholly Foreign Owned Enterprise in China, invested in two significant Biogas demonstration sites and advanced our Industrial VOC product development.”
“With the investments made and changes completed in 2010 Biorem is positioned to achieve improved financial performance” added Mr. Bruijns. “We have come into 2011 with a backlog of $12.1 million while our key market, the United States, continues to struggle with its economic recovery.”
THREE MONTHS ENDED DECEMBER 31, 2010 Gross profit in Q4 2010 was $919,000 down significantly from $1,608,000 in Q4 2009. The Gross Margin decrease in Q4 of 2010 can be attributed to several factors including an increase in the Company’s warranty and commissioning provision, an increase in the valuation allowance on certain inventory, and the impacts of three lower margin contracts that the Company accepted for strategic reasons. The revised warranty and commissioning methodology has taken into account updated historical experience rates as well as the inclusion of additional indirect and direct costs relating to items such as travel and internal labour which were previously not factored into the warranty estimate. Management believes that the revised methodology provides a better estimate of the warranty and commissioning costs. Total operating expenses in Q4 2010 were $1,777,000 compared to $1,611,755 in Q4 2009. In Q4 2010, Adjusted EBITDA was $(858,000), down from $(2,000) in the same period a year ago.
Net loss for the fourth quarter of 2010 was $1,526,000, or a loss of $0.13 per basic and diluted share, compared to net loss of $360,000, or $0.04 per basic and diluted share in the fourth quarter of 2009. The net loss in Q4 2010 was caused by an increase in our allowance for bad debts and the following non-cash items; an increase in the warranty and commissioning provision, a partial write-down of the deferred financing costs in connection with the debt repayment, the accelerated depreciation of certain pilot plants and the write down of investment tax credit asset. Gross profit was $5,084,000 for the year-ended December 31, 2010, down 33.0% from gross profit of $7,588,000 for the year-ended December 31, 2009. The Gross profit decline can be attributed to the Company delivering two strategic projects during 2010, investing in a demonstration pilot, and increasing its warranty and commissioning provision at the end of 2010. Total operating expenses were $6,628,000 for the year-ended December 31, 2010 compared to $6,201,000 for the year-ended December 31, 2009. The increase was due to the Company significantly focusing on research into proprietary technology for use in Biogas Sweetening and VOC applications. In fiscal 2010, Adjusted EBITDA decreased to $(1,544,000) from $1,387,000 in fiscal 2009.
Net loss for fiscal 2010 was $3,138,000, or a loss of $0.26 per basic and diluted share, compared to net loss of $503,000, or a loss of $0.04 per basic and diluted share in 2009. As at December 31, 2010, the Company had working capital of $1,734,000, including cash and short-term investments of $831,000, trade and other receivables of $5,010,000, and unbilled revenue of $4,602,000, compared to total working capital of $7,089,000, cash and short-term investments of $4,031,000, trade and other receivables of $2,898,000, and unbilled revenue of $3,449,000 as at December 31, 2009. Working capital was negatively impacted by cash used in operations of $1,857,000, the early repayment of long term debt of $1,000,000 and the inclusion of the long term debt in current liabilities in 2010 as the amount becomes due on October 31, 2011. Excluding the long term debt from the 2010 calculation of working capital would result in an adjusted working capital of $3,568,000 as at December 31, 2010. At October 31, 2011 the Company will be required to pay the outstanding balance of its debenture totaling $2,000,000.
For further information, please contact: 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.
Forward-Looking Statements
Non-GAAP Measures
Order Bookings and Order Backlog are non-GAAP measures that the Company uses to evaluate its sales performance. Order Bookings are those binding contracts that the Company enters into with a third party for the delivery of our products or services. As Order Bookings are received, the contract value (before any associated sales taxes) is included in the Order Backlog. The Order Backlog is reduced by the revenue that is recognized on each project and then adjusted for any currency changes. |
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