BIOREM Technologies Inc.

BIOREM Technologies Inc.

November 11, 2005 09:00 ET

Biorem Reports 9% Increase In Third Quarter Revenue

GUELPH, ONTARIO--(CCNMatthews - Nov. 11, 2005) -


Biorem Inc. (TSX VENTURE:BRM) announced today its results for the third quarter and the nine month year to date period ended September 30, 2005, which are summarized in the following table:

Quarter Quarter Year to Year to
Information in table Ended Ended Date Date
is in thousands except per Sept 30, Sept 30, Sept 30, Sept 30,
share data 2005 2004 2005 2004
REVENUE $3,159 $2,904 $7,465 $7,923
EBITDA (1) 220 725 746 1,302
NET EARNINGS 12 379 252 642
BASIC EARNINGS PER SHARE 0.00 0.27 0.03 0.51
DILUTED EARNINGS PER SHARE 0.00 0.06 0.03 0.12
WEIGHTED AVERAGE COMMON SHARES 10,255 1,401 9,571 1,268

BIOREM Inc completed the purchase of Biocube LLC assets and business on July 1, 2005 and BIOREM Environmental Inc commenced operations in Victor, NY. BIOREM Inc now consists of BIOREM Environmental Inc and BIOREM Technologies Inc.

The consolidated revenue of BIOREM Inc in Q3 was $3,159,000, which is up $255,000 or 9% over the prior year. Revenue of BIOREM Environmental Inc was $631,000 during the third quarter and revenue of BIOREM Technologies Inc was $2,528,000 down 13% from prior year. The addition of the Biocube unique line of modular biofilters for odour control, used in the small to intermediate airflow range, provides BIOREM with a broader customer base and a more comprehensive product line.

Commenting on the third quarter revenue Brian Herner, President & CEO said, "Revenues continue to grow, quarter over quarter, and we are beginning to close the gap over prior year. 2004 revenue benefited from a single, large industrial order of $3.7 million, which was not repeated in 2005. This business has been replaced with increasing orders for municipal applications. Our order backlog has built well this year and will positively impact our revenue growth going forward."

New orders in the third quarter were $2,200,000 and the order backlog is $9,500,000, which is up $3,700,000 or 64% over the prior year. Year to date new orders are $12,350,000, which is up 24% over the prior year. Included in the new orders received during the quarter was a license fee from Ecovation, Inc., Victor, NY to use BIOREM's biofilter odour control technology in the edible foods market in the United States.

Net Earnings in the quarter of $12,000 was down $367,000 compared to the prior year, mainly due to a lower gross margin and an increase in the foreign exchange loss. The gross margin in Q3 is 43.1% compared to 59% last year. Last year margins were unusually high due to favorable manufacturing cost variances recognized in the period. A foreign exchange loss of $192,000 was reflected in this quarter due to a 700 basis point decline in the spot value of the U.S. dollar over the quarter.

The purchase price of Biocube LLC of $2,952,000 was financed from cash on hand. At September 30, 2005 the Company's working capital is strong with current assets exceeding current liabilities by $2,872,000. During the quarter the Company also completed a private placement of 109,904 common shares at an aggregate subscription price of $345,883 ($3.15 per share) by Mr. Herbert Ego, former President and CEO of Biocube. Mr. Ego has joined the senior management team of BIOREM and will play an integral role in the management of the combined business development and the rapid expansion of the international business.

Further commenting on the third quarter results Brian Herner, President & CEO said, "While somewhat slower than anticipated, the market growth for our products is beginning to accelerate in the US and Internationally. Orders have been received from Israel and Jordan in Q3 and the acquisition of Biocube brings us stronger International presence. New staff has been added to develop the market in China and additional sales and marketing resources are planned for the North American market. With a solid backlog, additional sales resources and improved market accessibility, I am confident that accelerated revenue growth will follow."

BIOREM® manufactures BIOSORBENS™ biofilter media and is a leading supplier of biofilters for air pollution control in municipal and industrial applications, including the recently acquired BIOCUBE® modular units. With over 400 installed systems and over a decade of experience, the Company's biofilters are the technology of choice for odor control at Wastewater Treatment Plants across North America.

(1) EBITDA is a non-GAAP earnings measure, therefore, it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization. This measure is important to management since it is used by potential lenders to evaluate the ongoing cash generating capability of the Company and thus the amounts those lenders are willing to lend to the Company.

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

Contact Information

  • BIOREM Technologies Inc.
    Greg Flanagan
    Chief Financial Officer
    (519) 767-9100 x404
    BIOREM Technologies Inc.
    Tim Gallagher
    Investor Relations
    (519) 767-9100 x404