Bennett Environmental Inc.
TSX : BEV
AMEX : BEL

Bennett Environmental Inc.

June 02, 2006 07:55 ET

CORRECTION FROM SOURCE: Bennett Environmental Inc. Corrects Minor Errors in Report of Fourth Quarter and 2005 Year End Results

OAKVILLE, ONTARIO--(CCNMatthews - June 2, 2006) - Bennett Environmental Inc. ("BEI" or the "Company") (TSX:BEV)(AMEX:BEL) announced on May 31, 2006 its financial results for the year ended December 31, 2005 and operating results for the fourth quarter and full year 2005 and reported on other developments.

The Company wishes to correct two minor errors in the May 31 press release. These changes are noted below. These changes do not affect the net earnings as previously reported, nor do they affect any annual information contained in the financial statements released on May 31.

On page 2 of the May 31 press release under the heading "Financial Results-Fourth Quarter", the amount of sales of fourth quarter of 2004 was incorrectly stated as $4.8 million, which has been changed to $4.9 million. On page 5 of the May 31 press release in the Consolidated Statement of Operations and Retained Earnings, with respect to the 3 months ended 31-Dec-05, the two items of "Administration and business development" of $3,845,469 and "Settlement of litigation" of $878,025 were incorrectly listed as separate items and have been combined as one item as "Administration and business development" of $4,723,494. There are no other amendments to the press release.

The full text of the press release, as amended, is attached as Schedule "A" hereto.

About Bennett Environmental Inc.

Bennett Environmental Inc. is a North American leader in high temperature treatment services for the remediation of contaminated soil and has provided thermal solutions to contamination problems throughout Quebec and the US. Bennett Environmental's technology provides for the safe, economical and permanent solution to contaminated soil. Independent testing has consistently proven that the technology operates well within the most stringent criteria in North America.

Bennett Environmental is listed on the Toronto Stock Exchange (Trading Symbol "BEV") and the American Stock Exchange (Trading Symbol "BEL").


Bennett Environmental Inc. ("BEI") Reports Fourth Quarter and 2005 Year End Results (Schedule A)

Highlights

- BEI confirms asset impairment of $15.4 million at its facility in Belledune, New Brunswick. This impairment contributes to the cumulative loss of $20.2 million in the fourth quarter of 2005, or $0.94 per share on revenues of $8.8 million for the three months ended December 31, 2005

- For the full year, the net loss was $25 million ($1.16 per common share)

- Contribution margins ("defined as sales less operating costs") increased significantly over 2004

- During the fourth quarter of 2005 the Company's cash position increased by approximately $2 million in cash

- Recupere Sol Inc. ("RSI") expects to start up production June 5, 2006


Oakville, Ontario, May 31, 2006 - Bennett Environmental Inc. today announced its financial results for the year ended December 31, 2005 and operating results for the fourth quarter and full year 2005 and reported on other developments.

Financial results

Fourth Quarter 2005

The Company announced an after tax loss of $20.2 million or $(0.94 per common share) on revenues of $8.8 million in the fourth quarter of 2005. This compares to a net loss of $9.7 million ($0.53 per common share) on sales of $4.9 million in same quarter of 2004.

Twelve months ended December 31, 2005

For the year ended December 31, 2005, the Company recorded a loss of $25 million ($1.16 per common share) on revenues of $29.3 million, compared to a loss of $14 million ($0.76 per common share) on revenues of $30.6 million on December 31, 2004.

The primary reasons for these losses were due to one time items, primarily taken in the fourth quarter of 2005. They are:

1. $15.4 million asset impairment at the facility in Belledune; and

2. $1.1 million of legal fees associated with efforts to resolve previously reported regulatory matters.

In 2005, gross margins increased significantly for the year and were 33.5% of sales, compared to 16.6% of sales for the same period in 2004.

In 2005, administrative and business development costs fell by 10.7% from $15.8 million in 2004 to $14.1 million for the fiscal year ended December 31, 2005.

BEI is recording an asset impairment of $15.4 million relating to its facility in Belledune, New Brunswick. The Belledune facility was constructed in 2003 and 2004. During 2005 the plant was idle and did not process any material commercially. The permit negotiated in 2003 was focused mainly on creosote-contaminated soils. The viability for processing this type of contaminated soil has become uncertain. Based on this the Company believes that these assets are impaired. Management believes that over time, positive cash flow will be generated from this facility to support the revised valuation.

Amortization in 2005 was $4.3 million, compared to $3.7 million a year earlier. The higher amortization in 2005 was a result of accelerated amortization of certain equipment and licenses the company purchased in 2003.

During the fourth quarter of 2005 the Company's cash position increased by approximately $2 million in cash. All of this cash was generated from changes in working capital. Most of this change was due to a recovery of income taxes.

Operating results

In the fourth quarter of 2005, the Company processed approximately 15,200 tonnes from its Quebec facility and approximately 330,000 kilograms in its Cornwall facility. This compares to approximately 15,100 tonnes being processed at the Company's Quebec facility and 442,000 kilograms at the Company's Cornwall facility in the third quarter of 2005. While the volumes are roughly the same in the fourth quarter as they were in the third quarter of 2005 contribution margins were lower as a result of the Company processing material from one contract that generated lower revenue per tonne. The Company processed most of the material from this contract in the fourth quarter of 2005.

BEI expects the plant will resume full operations on June 5, 2006.

The financial statements for the year ended December 31, 2005 were filed with the securities regulators in Canada on May 31, 2006.

Forward Looking Statements

Certain statements contained in this press release and in certain documents incorporated by reference into this press release constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and "confident" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. BEI believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this press release should not be unduly relied upon. These statements speak only as of the date of this press release. BEI undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Bennett Environmental Inc.

Bennett Environmental Inc. is a North American leader in high temperature treatment services for the remediation of contaminated soil and has provided thermal solutions to contamination problems throughout Quebec and the US. Bennett Environmental's technology provides for the safe, economical and permanent solution to contaminated soil. Independent testing has consistently proven that the technology operates well within the most stringent criteria in North America.

Bennett Environmental is listed on the Toronto Stock Exchange (Trading Symbol "BEV") and the American Stock Exchange (Trading Symbol "BEL").



BENNETT ENVIRONMENTAL INC.
Consolidated Balance Sheets
(Expressed in Canadian dollars)

December 31, 2005 and 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------

Assets

Current assets:
Cash and cash equivalents $ 7,844,521 $ 13,830,570
Restricted cash 1,349,316 1,349,490
Accounts receivable 16,817,042 14,316,648
Income tax receivable 959,417 3,417,204
Deferred costs 625,506 331,709
Prepaid expenses and other 860,991 1,199,871
---------------------------------------------------------------------
28,456,793 34,445,492

Future income tax asset 595,091 891,826

Note receivable 173,250 315,000


Property, plant and equipment 33,166,627 48,920,377

Other assets 2,486,673 4,793,069

Goodwill 646,638 646,638
---------------------------------------------------------------------
$ 65,525,072 $ 90,012,402
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities and Shareholders'
Equity

Current liabilities:
Accounts payable and accrued
liabilities $ 5,820,376 $ 6,646,005
Deferred revenue 1,416,286 661,557
Current portion of long-term
liabilities 1,117,747 1,218,405
---------------------------------------------------------------------
8,354,409 8,525,967
---------------------------------------------------------------------

Long-term liabilities 808,996 1,483,045

Shareholders' equity:
Share capital 67,997,683 67,644,681
Contributed surplus 2,645,303 1,595,205
(Deficit) Retained earnings (14,281,319) 10,763,504
---------------------------------------------------------------------
56,361,667 80,003,390
---------------------------------------------------------------------

$ 65,525,072 $ 90,012,402
---------------------------------------------------------------------
---------------------------------------------------------------------



BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Operations and Retained Earnings
(Expressed in Canadian dollars)
For the three and twelve-month periods ended December 31, 2005 with
comparative figures for December 31, 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
12 months 12 months 3 months 3 months
31-Dec-05 31-Dec-04 31-Dec-05 31-Dec-04
---------------------------------------------------------------------
(Restated) (Restated)

Sales $ 29,250,249 $30,642,052 $ 8,777,025 $4,861,021
---------------------------------------------------------------------
Expenses

Operating costs 19,456,611 25,568,125 5,327,110 8,699,393
Administration and
business
development 14,089,405 15,780,332 4,723,494 4,528,906

Amortization 4,307,568 3,771,371 792,513 1,594,597
Foreign exchange 325,611 273,626 (31,652) 236,449
Settlement of
litigation 878,025 - - -

Loss from asset
impairment 15,376,475 4,343,979 15,376,475 -
Interest expense 50,675 305,313 (77,876) 233,335
---------------------------------------------------------------------

54,484,370 50,042,746 26,110,064 15,292,680
---------------------------------------------------------------------

Loss before
undernoted (25,234,121) (19,400,694) (17,333,039)(10,431,659)
Loss on investment - (818,193) - (818,193)
Interest and other
income 381,752 580,280 88,870 141,812
---------------------------------------------------------------------
Loss before income
taxes (24,852,369) (19,638,607) (17,244,169)(11,108,040)
Income tax
(recoverable)
expense
Current (104,281) (2,937,047) 416,399 632,328

Future 296,735 (2,746,536) 2,539,521 (2,059,744)
---------------------------------------------------------------------
192,454 (5,683,583) 2,955,920 (1,427,416)
---------------------------------------------------------------------

Net loss (25,044,823) (13,955,024) (20,200,089) (9,680,624)
Retained Earnings,
beginning of
period 10,763,504 24,718,528 5,918,770 20,444,128
---------------------------------------------------------------------
(Deficit) Retained
Earnings, end of
period $(14,281,319) $10,763,504 $(14,281,319)$10,763,504
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic loss per
share $ ( 1.16) $ ( 0.76) $ (0.94)$ ( 0.53)
---------------------------------------------------------------------
---------------------------------------------------------------------

Fully diluted
loss per share $ (1.16) $ (0.76) $ (0.94)$ (0.53)



BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Cash Flows
(Expressed in Canadian Dollars)
For the three and twelve-month periods ended December 31, 2005
with comparative figures for December 31, 2004
---------------------------------------------------------------------
---------------------------------------------------------------------
12 months 12 months 3 months 3 months
31-Dec-05 31-Dec-04 31-Dec-05 31-Dec-04
---------------------------------------------------------------------
CASH PROVIDED BY (Restated) (Restated)
(USED IN):
Operations:
Net loss $(25,044,823)$(13,955,024)$(20,200,089)$(9,680,624)
Items not
involving cash
Amortization 4,307,568 3,771,371 792,513 1,594,597
Stock-based
compensation 1,050,098 675,176 639,614 185,228
Loss on disposal
of capital
assets 4,330 - 363 -
Loss (gain) on
investments (175,000) 818,193 - 818,193
Loss from asset
impairment 15,376,475 4,343,979 15,376,475 -
Future income
taxes 296,735 (2,746,536) 2,539,071 (487,193)
Increase in cash
surrender value
of life
insurance (79,242) (30,375) - -
Accretion expense 95,171 165,000 176,685 -
Change in non-cash
operating working
capital
Accounts
Receivable (2,500,394) 7,807,707 (1,970,344) 5,891,079
Deferred costs (293,797) (179,816) 432,242 (331,709)
Prepaid expenses
and other 338,880 955,112 312,197 1,605,944
Accounts payable
and accrued
liabilities (825,629) (3,928,117) 829,209 (879,632)
Deferred revenue 754,729 (152,852) 689,763 661,557
Income taxes
Receivable
/payable 2,457,787 (4,513,449) 3,049,817 152,171
Severance payable (800,378) 1,660,000 (407,094) 1,660,000
---------------------------------------------------------------------
(5,037,490) (5,309,631) 2,260,422 1,189,611
---------------------------------------------------------------------
Financing
Activities
Repayments of
long-term
liabilities (69,500) (121,744) (87,974) 2,391,616
Issuance of share
capital net of
share issue
costs 353,002 37,838,129 - 11,925,848
Shares
repurchased and
held in treasury - (71,879) - ( 71,879)
Decrease
(increase) in
restricted cash 174 (316,080) - -
---------------------------------------------------------------------
283,676 37,328,426 (87,974) 14,245,585
---------------------------------------------------------------------
Investing Activities
Note receivable 141,750 ( 142,500) (8,250) (15,000)
Proceeds on
disposal of
Investments 175,000 - - -
Proceeds on
disposal of
capital assets 108,170 - 2,055 -
Purchase of
capital assets (1,572,465) (28,304,636) (155,658) (4,920,771)
Increase in
license,
permits and
other assets (84,690) (1,294,032) - (926,489)
---------------------------------------------------------------------
(1,232,235) (29,741,168) (161,853) (5,862,260)
---------------------------------------------------------------------
(Decrease)
increase
in cash & cash
equivalents (5,986,049) 2,277,627 2,010,595 9,572,936
Cash & cash
equivalents,
beginning of
period 13,830,570 11,552,943 5,833,926 4,257,634
---------------------------------------------------------------------
Cash & cash
equivalents,
end of period $ 7,844,521 $ 13,830,570 $ 7,844,521 $13,830,570
---------------------------------------------------------------------
---------------------------------------------------------------------
Supplemental
disclosure of
cash flow
information:
Cash paid for:
Interest paid $ 42,358 $ 20,800 $ - $ 20,800
Income taxes
paid (refunded) (2,821,142) 385,212 (2,572,259) (688,242)
Supplemental
disclosure of
non-cash
transactions:
Stock options
granted for
services rendered - 436,461 - 185,228



Contact Information

  • Bennett Environmental Inc.
    Al Bulckaert
    President & CEO
    (905) 339-1540
    or
    Bennett Environmental Inc.
    Andrew Boulanger
    Vice President/CFO
    (905) 339-1540
    www.bennettenv.com