Consolidated Envirowaste Industries Inc.
TSX VENTURE : CWD

Consolidated Envirowaste Industries Inc.

January 26, 2010 12:48 ET

Consolidated Envirowaste Reports 2009 Annual Results

ABBOTSFORD, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2010) - Consolidated Envirowaste Industries Inc. (TSX VENTURE:CWD) announced today its results for the year ended September 30, 2009. A complete copy of the Company's audited annual financial statements and accompanying management's discussion and analysis is available on SEDAR at www.sedar.com. Excerpts from the annual audited financial statements are as follows:

         
September 30 2009   2008  
         
Total Revenues $18,276,420   $19,411,701  
Net loss from continuing operations ($764,835 ) ($1,097,162 )
Loss per share-basic ($0.07 ) ($0.11 )
Loss per share-diluted ($0.07 ) ($0.11 )
Net loss for the year ($764,835 ) ($1,097,162 )
Loss per share-basic ($0.07 ) ($0.11 )
Loss per share-diluted ($0.07 ) ($0.11 )
Weighted average number of common shares outstanding-basic 10,414,699   10,414,699  
Weighted average number of common shares outstanding-diluted 10,414,699   10,414,699  
         

The Company recorded a net loss after income taxes of $764,835 or $0.07 per share ($0.07 per share diluted) for the year ended September 30, 2009 compared to a net loss of $1,097,162 or $0.11 per share ($0.11 per share diluted) for the year ended September 30, 2008. Results for the 2009 fiscal year were characterized by the varying effects of the continuing economic malaise in Florida and operating adjustments made by the Company's CRR Florida subsidiary to meet these conditions, weakening of the Canadian dollar versus the U.S. dollar until late in the year, higher capacity utilization in the Company's Canadian operations offset by poor weather conditions at the onset of the spring growing season and a continuation of inclement weather on the Canadian Prairies throughout the remainder of the year, and the decision by management to establish a valuation allowance for the Company's U.S. future income tax assets resulting from the continued poor performance of the U.S. operations in the face of the economic conditions in Florida.

Total revenue for the year ended September 30, 2009 declined 6% or approximately $1,135,000, from $19,411,701 for the year ended September 30, 2008 to $18,276,420. While the Company's U.S. dollar denominated revenues for the year ended September 30, 2009 fell 22% in terms of U.S. dollars compared to 2008, currency translation differences increased its U.S. dollar denominated portion of revenues by approximately $1,984,000 or 17% to reduce the impact of the revenue shortfall to only 9% in terms of Canadian funds. Less volatile fuel costs (44% lower than for fiscal 2008) helped ease pressure on manufacturing overhead and transportation costs. Having made significant operational adjustments to the Company's U.S. operations during the current fiscal year, the Company managed to increase operating margins during the year ended September 30, 2009 compared to 2008 with strong cost controls on its manufacturing inputs.

A significant change in income tax amounts between fiscal year ends 2009 and 2008 also affected the comparative net losses between the two years, with income tax expense of approximately $141,000 for the year ended September 30, 2009 compared to an income tax recovery of approximately $669,000 for the year ended September 30, 2008. As management reviewed the U.S. operating results for this and previous fiscal years, the timing of future income tax asset benefits, and the prospects of the U.S. subsidiaries' poor results continuing into and beyond the 2010 fiscal year, management decided, in consultation with the Company's tax advisors, that the Company would, more likely than not, be unable to utilize these future income tax assets prior to expiration, and wrote off these future income tax assets during the current fiscal year.

The Company recorded a net loss after provision for income taxes of $935,196, or $0.09 per share ($0.09 per share diluted) for the fourth quarter of 2009, compared to a net loss after income tax recoveries of $548,426, or $0.05 per share ($0.05 per share diluted) for the same quarter of 2008.

Revenue for the quarter, at $3,730,673, was down approximately 15% from $4,401,108 reported in the fourth quarter of 2008. Fourth quarter comparative translation of the Company's U.S. dollar denominated revenues improved comparative revenues by approximately 5% or $168,000 as the Canadian dollar rebounded late in the fourth quarter of fiscal 2009, but not nearly to the levels it was during last year's fourth quarter.

For the year ended September 30, 2009, cash provided by operating activities after changes in working capital was $1,138,742, compared to $867,014 provided by operating activities after changes in working capital for the year ended September 30, 2008, reflecting a return to the Company's seasonal operating characteristics and the $474,000 swing in cash provided by the write-down of the future income tax benefits in the current fiscal year.

We expect the 2010 fiscal year to reflect seasonal operating patterns experienced over the past two years. We also expect a continuation of the challenging Florida economic environment well into the 2010 fiscal year and beyond. The upward trend in fuel prices continues to be an operational concern. The Company intends to maintain strong operating cost controls to optimize operations in the face of these challenges and to explore new opportunities as they present themselves.

Consolidated Envirowaste Industries Inc. is a leading processor of wood and other organic wastes in Western Canada and Florida. The Company markets and supplies biomass boiler fuel for electric generation facilities, charcoal manufacturers and pulp and paper mills in the U.S., bulk landscaping products in both of these regions, and packaged soil products to major Western Canadian retailers.

Forward-Looking Statements This report contains statements that are forward-looking in nature. Readers are cautioned that such forward-looking statements are not guarantees and may involve known and unknown risks and uncertainties that could cause the actual results of the Company to be materially different from those expressed or implied by those forward-looking statements. Such risks include, among others: general economic and business conditions, weather factors, competition, product selling prices, the cost and availability of raw materials, operating costs, changes in foreign currency exchange rates, dependence on contracts, the regulatory environment, seasonality, risk of liability for environmental damage, risks associated with litigation, and concentration of shareholder control. For a fuller description of those risks, please see the sections headed "Critical Accounting Estimates" and "Risk Factors" in management's discussion and analysis for the year ended September 30, 2009, a copy of which is available under the Company's name on SEDAR at www.sedar.com.

Consolidated Envirowaste Industries Inc.

James E. Darby, Chairman and Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Consolidated Envirowaste Industries Inc.
    Doug Halward
    604-856-6836