BIOREM Technologies Inc.
TSX VENTURE : BRM

BIOREM Technologies Inc.

May 12, 2005 17:41 ET

Biorem Reports Record Orders of $4.7 Million in First Quarter

GUELPH, ONTARIO--(CCNMatthews - May 12, 2005) -

NOT FOR U.S. DISTRIBUTION

Biorem Inc (TSX VENTURE:BRM) announced today its results for the first quarter ended March 31, 2005, which are summarized in the following table:



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Information in table is in thousands Quarter Ended Quarter Ended
except per share data Mar. 31, 2005 Mar. 31, 2004
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REVENUE $1,675 $2,196
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NET EARNINGS $91 $48
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BASIC EARNINGS PER SHARE 0.01 0.04
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DILUTED EARNINGS PER SHARE 0.01 0.01
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WEIGHTED AVERAGE COMMON SHARES 8,296 1,202
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The overall trend of business growth is best determined by the value of orders for the period and the order backlog. Completion of projects and revenue recognition is dependent on the rate at which the customers require delivery to meet their project schedules and can vary considerably from quarter to quarter. New orders valued at $4,750,000 were received in the first quarter of 2005, bringing the total order backlog to $7,750,000 at the end of the quarter, which is $1,920,000 or 33% higher than first quarter of prior year. As our average project size continues to increase, we will have longer timelines for project completion. Over time, this increase in the project size will increase the backlog to revenue ratio.

First quarter revenue for our core municipal odour control business is typically low as projects are completed at calendar year end and new projects for the coming year are still in the contract preparation stage. Revenue in Q1 2005 was down from 2004. In 2004 the core municipal business was supplemented with revenue of $774,000 from a single large industrial contract for the rendering industry. Revenue in Q1 2005 is up 17% in our core municipal odour control business over first quarter 2004.

Improved margins due to project mix and our cost reduction program and lower operating expenses due to reduced interest costs and SR&ED tax credits contributed to the generation of $91,000 of net earnings. Earnings per share on a fully diluted basis are $0.01, equal to the prior year level.

On January 17, 2005, the Qualifying Transaction of the Capital Pool Corporation was completed. As a result of this transaction, the company has virtually no long term debt and cash of $4,400,145 at the end of the first quarter. As part of that transaction, 7,919,243 common shares were issued. Basic earnings per share are $0.03 below the prior year due to the increase in the number of shares outstanding.

In 2004, we established the industrial business unit specifically to target growing industrial markets. These markets include chemical and surface coating applications, food processing plants, composite board industry and pet food and rendering. Identified opportunities in these areas have increased from approximately $20 million to $55 million over the last six months. Industrial orders received in first quarter represented approximately 10% of new orders.

Commenting on the first quarter results Brian Herner, President & CEO said. "I am particularly pleased with the orders we achieved in the first quarter. Our order backlog is very strong for this period and the extra sales resources that we committed in this area last year are beginning to produce the desired results. The increased number of orders and the progress in geographic expansion and scope of applications demonstrates the vibrancy of the market and our capability to exploit it," said Herner. Orders for first quarter include a greenfield municipal project in the Southeast US (Virginia) at C$1.1 million and another project in the Midwest US (Nebraska) for C$0.65 million.

There is an increasing demand for biofilters for the reduction of air pollution. The composite board industry, of which there are 450 plants in North America, is under new EPA (Environmental Protection Agency) regulations in the US and there is increased pressure from Canadian environmental regulatory authorities to reduce formaldehyde emissions. Biofilters have been deemed an accepted technology by the EPA and there is intense interest by industry to substitute biofilters for thermal oxidizers that are commonly used. Kyoto compliance requirements will further push the market to the use of the more environmentally favoured, biofilter technology.

The company continues to pursue developments in the international market and exploration of acquisition opportunities. "We are carefully assessing strategic alternatives and are on target to advance these initiatives this year." said Herner. "The recent addition of Greg Flanagan as CFO will provide BIOREM with a key additional resource to implement action in these areas."

A major program undertaken by the Company is to reduce the competitive cost of biofiltration through further advances in media development. Research projects underway confirm that this can be achieved and the Company will continue to fund this development to sustain technology leadership and market expansion.

BIOREM through its wholly owned subsidiary, BIOREM Technologies Inc., manufactures a BIOSORBENS™ biofilter media and is a leading supplier of biofilters for air pollution control in municipal and industrial applications including the BASYS™ modular and BIOFILTER™ field erected systems. With over 100 installed systems and over a decade of experience, the Corporation's groundbreaking biofilters are the technology of choice for Wastewater Treatment plants across North America. http://www.biorem.biz.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.

Forward-Looking Statements

This press release contains forward-looking statements based on current expectations. These forward-looking statements contain various risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the disclosure materials, financial statements and MD&A filed with the securities regulatory authorities in Canada on http://www.sedar.com

Contact Information

  • BIOREM Technologies Inc.
    Greg Flanagan
    Chief Financial Officer
    (519) 767-9100 x404
    or
    BIOREM Technologies Inc.
    Tim Gallagher
    Investor Relations
    (519) 767-9100 x404
    ir@biorem.biz
    http://www.biorem.biz