CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

March 31, 2006 08:30 ET

Ceapro announces 2005 financial results

EDMONTON, March 31 - Ceapro Inc. (TSX VENTURE:CZO) today released its
financial results for 2005. Highlights for the year include:-



- Overall sales increased by 37%
- Active ingredient sales increased by 61%
- Gross margins increased by 10% to 58%
- EBITDA grew to $156,000, an increase of $433,000
- Working capital increased to $1 million
- Assets grew by $701,000
- Phase 1 expansion of manufacturing capacity completed
- Technology base expanded and intellectual property value increased by
filing 15 new patents


In summary, revenues of $2.8 million for 2005 were up from $2.4 million
in 2004. Net income improved from a loss of $398,000 in 2004 to a loss of
$57,000 or $0.00 per share in 2005.

"Overall, 2005 was a year of strong growth and investment for Ceapro,"
said Dr. Mark Redmond, Ceapro's President and CEO. "The initiatives undertaken
during the second half of 2004 resulted in increased product sales which made
2005 our best revenue year to date. The Company operated on a near break-even
basis as the Company continued to invest in market expansions, production
capacity increases, and technology development. This strategy supports
immediate growth with the benefit of increasing value and returns in the
mid-term. 2005 was a year of strong organic growth; we will now look to
accelerate growth with new partnerships and expanded opportunities."

During the year, Ceapro also filed for 15 patents in various countries to
protect new oat processing methods, beta glucan drug delivery technology, and
new CeaProve® formulations.

The increased sales of our extracts and expansion of our animal health
business have been notable and analysis of Ceapro's financials (excluding the
development costs associated with CeaProve®) gives a positive indication of
achieving profitability.



Selected Annual Information

$000s except per share data 2005 2004 2003
-------------------------------------------------------------------------
Total revenues 2,763 2,420 2,424
Net (loss) income (57) (398) 442
EBITDA 156 (277) 550
Basic (loss) income per share (0.00) (0.01) 0.01
Diluted (loss) income per share (0.00) (0.01) 0.01
Total assets 2,419 1,718 1,255
Total liabilities 1,958 1,604 873
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Outlook

We are encouraged by strong first quarter sales and anticipate further
revenue growth throughout 2006. The expansion of sales to existing customers,
and the introduction of new products to new customers are expected to further
promote sales of both active ingredients and veterinary therapeutic products.
It is expected that the Company will undertake further expansion of
manufacturing capacity to meet the anticipated needs for increased sales.

Ceapro has made strides in the development of CeaProve®, our diabetes
screening product. Our strategy has reached the point of forming alliances and
partnerships that will ensure market penetration in the workplace, pharmacies,
clinical laboratories, and doctor's offices. It is expected that during 2006
we will begin to generate revenues from CeaProve® once utilization commences
in the newly-identified screening service markets and partners commence
ordering product.

Ceapro's export sales have continued to increase despite the significant
strengthening of the Canadian dollar. While the exchange rate increase from
2004 to 2005 had a $166,000 negative effect on Ceapro's revenues, we remain
confident that enhanced production efficiencies and expanded markets will
enable us to continue to stimulate financial growth and corporate performance.

Ceapro advises that its audited financial statements for the year ended
December 31, 2005, and accompanying management's discussion and analysis, have
been filed with securities regulators and will be available on www.sedar.com.
The Company's annual report will be mailed to shareholders at the end of
April. The annual meeting of shareholders will take place in Edmonton on
June 1, 2005.

About Ceapro Inc.

Ceapro Inc. is a growth stage biotechnology company. Ceapro's core
technology is the extraction of functional, active ingredients. We will
continue to add value to our extracts by manufacturing medical and therapeutic
products, supporting the use of our extracts in products for human and animal
health and introducing health and wellness services employing our CeaProve®
diagnostic technology. Ceapro shares trade on the TSX Venture Exchange under
the symbol CZO. To learn more about Ceapro, log on to our website at
www.ceapro.com. Shares Outstanding: 37,098,670, Recent Close: $0.28.

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

This release may contain forward-looking statements. Various factors
could cause actual results to differ materially from those projected in
forward-looking statements. Although the Company believes that the forward-
looking statements contained herein are reasonable, it can give no assurance
that the Company's expectations are correct. All forward-looking statements
are expressly qualified in their entirety by this cautionary statement.



CEAPRO INC.
Consolidated Balance Sheets

As at December 31
2005 2004
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ASSETS
CURRENT ASSETS
Cash $ 438,045 $ 96,266
Accounts receivable 982,347 425,160
Inventories 228,158 345,424
Prepaid expenses and deposits 90,761 66,473
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1,739,311 933,323
RESTRICTED CASH FOR THE PURCHASE OF
PROPERTY AND EQUIPMENT - 64,430

PROPERTY AND EQUIPMENT (note 3) 679,623 720,067
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$ 2,418,934 $ 1,717,820
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LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 284,863 $ 636,615
Deferred revenue 229,676 80,000
Current portion of convertible debentures
(note 4) - 17,510
Callable debt (note 5) 81,584 122,296
Current portion of long-term debt (note 6) 33,519 28,234
Current portion of royalties payable
(note 7) 106,508 104,498
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736,150 989,153
DEFERRED ROYALTY REVENUE (note 7(e)) 457,000 -
LONG-TERM DEBT (note 6) 436,731 471,766
EMPLOYEE FUTURE BENEFITS OBLIGATION (note 8) 159,946 76,586
ROYALTIES PAYABLE (note 7) 167,770 66,249
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1,957,597 1,603,754
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SHAREHOLDERS' EQUITY
SHARE CAPITAL (note 9 (b)) 2,414,830 1,995,443
CONTRIBUTED SURPLUS (note 9(c)) 106,888 121,997
DEFICIT (2,060,381) (2,003,374)
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461,337 114,066
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$ 2,418,934 $ 1,717,820
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See accompanying notes



CEAPRO INC.
Consolidated Statements of Net Loss and Deficit

Years ended December 31
2005 2004
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Revenue
Sales (note 11) $ 2,683,433 $ 1,956,961
Cost of goods sold 1,123,606 1,022,831
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Gross margin 1,559,827 934,130
Royalties, licenses, and product
development fees 80,000 462,758
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1,639,827 1,396,888
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-------------------------------------------------------------------------

Expenses
General and administration 982,887 833,346
Royalties 321,692 277,149
Sales and marketing 255,773 130,578
Amortization 161,550 91,962
Interest on long-term debt 41,310 10,662
Interest on callable debt, convertible
debentures, and other 10,386 17,841
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1,773,598 1,361,538
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(Loss) income from operations (133,771) 35,350
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Other income (expenses)
Research and product development (162,833) (302,487)
Loss on disposal of property and equipment - (12,389)
Other income (expenses) (note 12) 239,597 (118,211)
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76,764 (433,087)
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Loss before income taxes (57,007) (397,737)

Income taxes (note 13)
Current 435,143 654,483
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Reduction as a result of applying
non-capital losses carried forward against
the current year's taxable income (435,143) (654,483)
NET LOSS FOR THE YEAR (57,007) (397,737)

DEFICIT, BEGINNING OF YEAR (2,003,374) (1,605,637)
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DEFICIT, END OF YEAR $(2,060,381) $(2,003,374)
-------------------------------------------------------------------------
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Net loss per share: (note 14)
Basic $ (0.00) $ (0.01)
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Diluted $ (0.00) $ (0.01)
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See accompanying notes



CEAPRO INC.
Consolidated Statements of Cash Flows

Years ended December 31
2005 2004
-------------------------------------------------------------------------

Operating Activities
Net loss for the year $ (57,007) $ (397,737)
Items not affecting cash
Amortization 161,550 91,962
Loss on disposal of property and equipment - 12,389
Employee future benefits obligation 83,360 27,049
Stock based compensation 50,007 19,006
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237,910 (247,331)
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Changes in Non-Cash Working Capital Items
Accounts receivable (557,187) 88,994
Inventories 117,266 (229,868)
Prepaid expenses and deposits (24,288) (36,502)
Accounts payable and accrued liabilities (351,752) 252,558
Deferred revenue 149,676 80,000
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(666,285) 155,182
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(428,375) (92,149)
-------------------------------------------------------------------------

Investing Activities
Purchase of property and equipment (121,106) (477,230)
Restricted cash for the purchase of property
and equipment 64,430 (64,430)
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(56,676) (541,660)
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Financing Activities
Repayment of long-term debt (29,750) (44,832)
Proceeds from long-term debt - 500,000
Repayment of callable debt (40,712) (37,387)
Repayment of convertible debentures (20,000) (10,000)
Proceeds from issuance of share capital 238,817 111,131
Proceeds from exercise of stock options 117,944 -
Proceeds from royalty interest unit offering 457,000 -
Increase (decrease) in royalties payable 103,531 (37,280)
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826,830 481,632
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Increase (decrease) in cash 341,779 (152,177)
Cash at beginning of year 96,266 248,443
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CASH AT END OF YEAR $ 438,045 $ 96,266
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Supplementary information:
Interest paid $ 51,906 $ 26,300
Royalties paid $ 218,161 $ 312,502

See accompanying notes

Contact Information

  • Dr. Mark Redmond, President & CEO,
    Ceapro Inc., Telephone: (780) 421-4555