Bennett Environmental Inc.
TSX : BEV
AMEX : BEL

Bennett Environmental Inc.

November 02, 2005 09:57 ET

Bennett Announces Third Quarter Results

OAKVILLE, ONTARIO--(CCNMatthews - Nov. 2, 2005) - Bennett Environmental Inc. (TSX:BEV)(AMEX:BEL) -

- Revenue up - first profitable quarter since December 2003

- Positive earnings for the first time since Q4 2003

- 15,500 tonnes processed at a lower cost of production

- 12,000 tonnes in new orders received

Bennett Environmental Inc. (TSX:BEV)(AMEX:BEL) today announced financial and operating results for the three and nine months ended September 30, 2005.

The following table summarizes financial data for the seven most recently completed quarters, expressed in Canadian dollars (millions), except per share data:



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2005 2004
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Q3 Q2 Q1 Q4 Q3 Q2 Q1
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Net Sales 10.4 6.2 3.9 4.5 8.0 3.9 8.9
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EBITDA(a) 1.1 (0.7) (4.7) (8.9) (7.2) (2.4) 0.2
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Net
Income/(Loss) 0.2 (1.4) (3.6) (8.3) (7.8) (2.2) (0.3)
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Earnings Per
Share - Basic 0.01 (0.07) (0.17) (0.45) (0.43) (0.12) (0.02)
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Earnings Per
Share - Diluted 0.01 (0.07) (0.17) (0.45) (0.43) (0.12) (0.02)
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(a)Earnings before interest, taxes and amortization ("EBITDA") is not
a term defined by generally accepted accounting principles (GAAP).
For the purposes of this table EBITDA is defined as being pre-tax
earnings plus net interest expenses, amortization and any charges
to the impairment of fixed assets.


In the third quarter, sales grew to $10.4 million, 12,000 tonnes of new orders were received and the first time since Q4 of 2003 the Company recorded a net income of $0.2 million ($0.01 per share), compared to a loss of $7.8 million ($0.43 per share) for the same period in 2004.

The fundamental improvements which have been made to the business are now beginning to be demonstrated in the financial results. Bennett's focus, which included diversifying its customer base, increasing sales and productivity and reducing costs are clearly impacting the bottom line.

"This is the best quarter we have had since the end of 2003 and is as a direct result of the improvements we have made to our management and sales team, as well as business processes", says Al Bulckaert, President and CEO. Sales for the third quarter of 2005 were $10.4 million, compared to $8.0 million in the same period a year earlier. 15,144 tonnes were processed at the Company's Quebec facility and about 442,000 kilograms were processed at the Cornwall facility. As well, Bennett shipped close to 3,200 tonnes of non-hazardous material to non-Company owned landfill sites. Sales for the quarter can be broken down as follows: Quebec facility were approximately $8.7 million, the Cornwall facility were approximately $1.2 million, transportation of non-hazardous material to other landfill sites were $0.5 million.

While contribution margins were positive in the quarter they were negatively impacted by higher transportation and other energy related costs, however higher volumes offset these costs. Production rates were approximately 7.1 tonnes per hour in the quarter, compared to 9.1 tonnes per hour in the third quarter of 2004 and these slower production rates were related to the nature of the material being treated.

Administration and Business Development costs for the third quarter fell by 30% to $3.8 million, compared to $5.4 million for the same period a year earlier. Al Bulckaert comments that "if we removed the charge related to the shareholder class action, administrative and business development costs would have been $2.9 million in the quarter".

For the quarter ended September 30, 2005, cash generated by operating activities amounted to $2.8 million. The principal generation of cash from operating activities was an improvement in the collection of accounts receivable. This compares to a use of cash from operating activities of $2.5 million in the third quarter of 2004.

At the end of the third quarter of 2005, the Company had cash and equivalents of $7.2 million and working capital amounted to $21.5 million.

"The Company generated a net profit of $0.2 million. We are beginning to see improvements in our financial results as a result of our focus on diversifying and building solid customer relationships, cost containment and increased productivity", said Al Bulckaert, President and CEO.

Compliance testing for the Belledune facility will begin in the fourth quarter. Currently the facility in Belledune has approximately 6,000 tonnes of material in storage, with a requirement of only 5,000 tonnes for the compliance test.

Mr. Bulckaert added, "We ended the third quarter with approximately 9,800 tonnes in inventory and in the fourth quarter expect to process approximately 14,000 tonnes at our Quebec facility, 5,000 tonnes at the Belledune facility for the compliance test and we expect to exit the fourth quarter with a soil backlog."

Discussions and consultations are ongoing with Quebec's Ministry of Sustainable Development, Environment and Parks with regard to the Pre Order that was issued in September 2004.

In addition, the resolution of several issues, namely:



- the Minister of the Environment's abandonment of the Federal
Government's Appeal on the Transboundary Effects of the
Belledune Facility (which was struck down by the Federal
Court of Appeals); and

- the settlement in principle of the shareholder class action
dispute;


will go a long way to allow Bennett Environmental to focus on its business and operations, and removes a degree of uncertainty that has surrounded the Company for the past 15 months.

Operating Results for the Nine months ended September 30, 2005

The consolidated net loss for the nine months ended September 30, 2005 was $4.8 million, compared to a loss $10.3 million for the same period in 2004. In the first nine months of 2005, the Company processed approximately 29,000 tonnes of soil and other materials, compared to approximately 44,500 tonnes in the same period a year earlier.

Contribution margins in the first nine months of 2005 were approximately $6.3 million, compared to $1.9 million in the same period a year earlier. On a per tonne basis, contribution margins were approximately $219 per tonne compared to $43 in the same period a year earlier.

Bennett will hold its conference call on Wednesday, November 2, 2005 at 2:00 p.m. EST.

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 Canada 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)
As at September 30, 2005 with comparative figures
as at December 31, 2004
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September 30 December 31
2005 2004
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(unaudited) (audited)

Assets
Current assets
Cash and cash equivalents $ 7,183,242 $ 15,180,060
Accounts receivable 14,846,698 14,316,648
Deferred costs 1,057,748 331,709
Income Tax Receivable 4,009,234 3,417,204
Note Receivable 165,000 315,000
Prepaid expenses and other 1,173,188 1,199,871
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Total Current Assets 28,435,110 34,760,492
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Future Income Tax Asset 3,134,162 891,826
Property plant and equipment 47,386,625 48,920,377
Other assets 4,282,424 4,793,069
Goodwill 646,638 646,638
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$ 83,884,959 $ 90,012,402
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Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued
liabilities $ 4,991,167 $ 6,646,005
Deferred revenue 726,523 661,557
Current portion of other
long-term debt 1,191,748 1,218,405
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6,909,438 8,525,967

Other long-term debt 1,053,379 1,483,045

Shareholders' equity
Share capital 67,997,683 67,644,681
(Common shares outstanding
21,573,440 (2004 - 21,415,940)
Contributed surplus 2,005,689 1,595,205
Retained earnings 5,918,770 10,763,504
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75,922,142 80,003,390
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$ 83,884,959 $ 90,012,402
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BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Operations
and Retained Earnings
(unaudited)
(Expressed in Canadian dollars)
For the Three and Nine-Month Periods Ended September 30, 2005
with comparative figures for September 30, 2004
---------------------------------------------------------------------
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9 months ended 3 months ended
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
---------------------------------------------------------------------

Sales $20,473,224 $20,804,810 $10,396,117 $7,967,983
Expenses
Operating costs 14,129,501 18,929,455 5,279,858 9,619,609
Administration
and business
development 10,418,936 11,251,426 3,800,983 5,422,654
Amortization 3,515,055 1,916,935 1,087,864 635,211
Foreign exchange 357,263 37,177 226,482 112,317
Loss from asset
impairment - 4,343,979 - 4,343,979
Interest expense 128,551 71,978 50,178 23,677
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28,549,306 36,550,950 10,445,365 20,157,447
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Loss before
undernoted (8,076,082) (15,746,140) (49,248) (12,189,464)
Gain on
investment 175,000 - - -
Interest and
other income 292,882 438,468 78,438 188,391
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(Loss) income
before income
taxes (7,608,200) (15,307,672) 29,190 (12,001,073)

Income tax
(recovery)
expense
Current (520,680) (3,569,375) (291,389) (2,309,079)
Future (2,242,786) (1,455,352) 138,091 (1,894,312)
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(2,763,466) (5,024,727) (153,298) (4,203,391)
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(Loss) income
for the period (4,844,734) (10,282,945) 182,488 (7,797,682)

Retained
earnings,
beginning of
period 10,763,504 29,298,743 5,736,282 26,813,480
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Retained
earnings, end
of period $ 5,918,770 $ 19,015,798 $ 5,918,770 $ 19,015,798
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Basic earnings
per share (0.22) (0.56) 0.01 (0.43)
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Diluted
earnings per
share $ (0.22) $ (0.56) $ 0.01 $ (0.43)
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BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Cash Flows
(unaudited)
(Expressed in Canadian dollars)
For the Three and Nine-Month Periods Ended September 30,
2005 with comparative figures for September 30, 2004
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9 months ended 3 months ended
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
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CASH PROVIDED
BY (USED IN):
Operations
Loss for the
period $(4,844,734) $(10,282,945) $182,488 $(7,797,682)

Items not
involving cash
Amortization 3,515,055 1,916,935 1,087,864 635,211
Equity
investment loss - 128,193 - 61,593
Loss from asset
impairment 4,017 - 4,684 -
Stock-based
compensation 410,484 489,948 99,079 151,830
Gain on
investments (175,000) - - -
Write down of
investments - (47,380) - (47,380)
Loss from asset
impairment - 4,343,979 - 4,343,979
Future income
taxes
(recovery) (2,242,786) (1,455,352) 138,091 (1,894,312)

Change in non-cash
operating
working capital
Accounts
receivable (530,050) 7,065,349 1,173,997 901,242
Note receivable 150,000 (300,000) 150,000 (300,000)
Deferred costs (726,039) - (711,767) -
Prepaid
expenses and
other 26,683 (650,831) 697,111 339,925
Work-in-progress - 151,893 - 37,973
Accounts
payable and
accrued
liabilities (1,654,838) (2,398,365) 859,677 3,395,309
Income taxes
receivable/
payable (592,030) (6,531,007) (141,114) (2,333,787)
Deferred
revenue 64,966 (814,409) (757,774) -
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(6,594,272) (8,383,992) 2,782,336 (2,506,099)
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Investments:
Proceeds on
disposal of
investments 175,000 - - -
Proceeds on
disposal of
capital assets 108,355 - 43,355 -
Purchase of
capital
assets (1,418,658) (23,982,053) (133,958) (5,661,662)
Increase in
license,
permits and
other assets (163,922) (1,143,454) (52,091) (389,410)
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(1,299,225) (25,125,507) (142,694) (6,051,072)
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Financing:
Repayments of
long-term debt (456,323) (111,910) (146,406) (2,951)
Issuance of
common shares
net of share
issue
costs 353,002 26,642,180 360,675 226,762
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(103,321) 26,530,270 214,269 223,811
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Increase
(decrease) in
cash and cash
equivalents (7,996,818) (6,979,229) 2,853,911 (8,333,360)

Cash and cash
equivalents,
beginning of
period 15,180,060 12,586,353 4,329,331 13,940,484
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Cash and cash
equivalents,
end of period $ 7,183,242 $ 5,607,124 $ 7,183,242 $ 5,607,124
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See accompanying notes to interim consolidated financial statements.



Contact Information

  • Bennett Environmental Inc.
    Al Bulckaert
    Oakville office (905) 339-1540
    or
    Bennett Environmental Inc.
    Andy Boulanger
    Oakville office (905) 339-1540
    or
    Bennett Environmental Inc.
    Michael McSweeney
    Oakville office (905) 339-1540
    www.bennettenv.com