CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

November 09, 2005 09:09 ET

Ceapro announces 2005 third quarter financial results

EDMONTON, Nov. 9 - Ceapro Inc. (TSX VENTURE:CZO) today released its
third quarter financial results for 2005. Ceapro produced solid financial
results with strong performance in sales and improvements in margins. Sales
increased 25% to $2 million for the first time over nine months, marking a
significant milestone. However, costs associated with CeaProve™ affected
the overall financial results producing a net loss of $178,000 for the nine
month period ending September 30, 2005.

"We are pleased with our quarterly financial results especially the
continued growth in sales of active ingredients and the great strides we have
made in the development of CeaProve™, identifying new applications in the
areas of diabetes screening," stated Dr. Mark Redmond, President and CEO of
Ceapro. "Our financial outlook for 2005 is positive, having received sales
orders to achieve our best annual sales performance to date."


Third Quarter Highlights

- Sales climbed 87% to $654,000
- Sales of active ingredients up 185%
- Income from operations of $35,000
- Net loss of $125,000
- Working capital improved to $125,000
- Gross margins increased to 64% from 36%, reflecting changes in
product mix, higher sales of active ingredients, and improved plant
efficiency


Outlook

The initiatives undertaken last year have resulted in an increase in
sales, and our second quarter of 2005 was the highest revenue quarter in
Ceapro's history, and Ceapro followed that up with the second highest active
ingredient sales this quarter, which allowed us to match our active ingredient
sales that Ceapro had in 2003 and surpass 2004 active ingredient sales. Ceapro
generated income from operations in the third quarter of $35,000, and there
was significant improvement in our working capital. The expansion of sales to
existing customers, and the introduction of new products to new customers have
boosted sales of active ingredients. Ceapro has continued to make advances
with major exports despite the strengthening of the Canadian dollar over the
last year and few years.

Ceapro have made strides in the development of CeaProve™, our diabetes
screening product, identifying new applications in the areas of diabetes
monitoring and drug dosage determination. The signing of new distribution
agreements for veterinary therapeutic products in Asia and Canada, the
development of new veterinary therapeutic products and their addition to the
Japan distribution agreement all pave the way for increased sales in 2006.

Ceapro will continue to pursue additional financings to fund ongoing
working capital requirements and to secure the financial resources required to
support the expected increases in the volume of sales of existing products,
the introduction of new products to existing and new markets, and the further
development of new technology. We intend to implement our operating plans in a
measured and responsible manner. We caution that additional investments may be
required to continue to grow the business and product lines and availability
of these additional investments may affect the pace of growth.

About Ceapro Inc.

Ceapro Inc., an innovation-driven biotechnology company, develops and
commercializes organic products for medical, cosmetic, and animal health
industries using proprietary technology and natural, renewable resources.
Based in Edmonton, Alberta, Ceapro is one of Alberta Venture's Fastest Growing
Companies for 2004 and 2005 and is one of Profit Magazine's Next 100
Companies. Ceapro is also the recipient of the ASTech Award for Outstanding
Commercial Achievement for companies with annual sales of less than
$25 million. Ceapro's 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: 36,757,485, Recent Close: $0.45.

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


September 30 December 31
2005 2004
(Unaudited) (Audited)
-------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 119,017 $ 96,266
Accounts receivable 375,922 375,160
Inventories 231,628 345,424
Prepaid expenses and deposits 105,319 66,473
Deferred charges - 50,000
-------------------------------------------------------------------------
831,886 933,323

RESTRICTED CASH FOR THE PURCHASE OF
PROPERTY AND EQUIPMENT 3,515 64,430

PROPERTY AND EQUIPMENT (NET OF
ACCUMULATED AMORTIZATION) 674,239 720,067
-------------------------------------------------------------------------
$ 1,509,640 $ 1,717,820
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 408,423 $ 713,201
Deferred revenue - 80,000
Callable debt 92,367 122,296
Current portion of long-term debt 32,788 28,234
Current portion of convertible debentures - 17,510
Current portion of royalties payable 173,748 104,498
-------------------------------------------------------------------------
707,326 1,065,739

Long-Term Debt 446,906 471,766

Royalties Payable 78,778 66,249
-------------------------------------------------------------------------
1,233,010 1,603,754
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY

SHARE CAPITAL 2,338,227 1,995,443
CONTRIBUTED SURPLUS 121,329 121,997
DEFICIT (2,182,926) (2,003,374)
-------------------------------------------------------------------------
276,630 114,066
-------------------------------------------------------------------------
$ 1,509,640 $ 1,717,820
-------------------------------------------------------------------------



CEAPRO INC.
Consolidated Statements of Net (Loss) Income and Deficit
Unaudited

Nine Months Ended Quarters Ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenue
Sales $ 2,074,388 $ 1,657,754 $ 654,065 $ 349,080
Cost of goods sold 876,743 836,776 236,591 223,271
-------------------------------------------------------------------------

Gross margin 1,197,645 820,978 417,474 125,809
Royalties, licenses,
and product
development fees 80,000 292,758 - 65,258
-------------------------------------------------------------------------

1,277,645 1,113,736 417,474 191,067
-------------------------------------------------------------------------
Expenses
General and
administration 728,329 633,680 206,164 215,043
Royalties 245,358 225,650 68,236 45,984
Sales and marketing 174,261 95,791 54,675 35,142
Amortization 119,667 62,481 40,847 22,752
Interest on long-term
and callable debt 35,110 10,583 12,584 5,885
Interest on convertible
debentures and other 2,452 5,775 105 1,714
-------------------------------------------------------------------------

1,305,177 1,033,960 382,611 326,520
-------------------------------------------------------------------------

Income (loss) from
operations (27,532) 79,776 34,863 (135,453)
-------------------------------------------------------------------------

Other income (expenses)
Research and product
development (368,702) (248,165) (141,475) (136,828)
Loss on disposal of
property and
equipment - (12,389) - (7,218)
Other income
(expenses) 216,682 (139,120) (17,957) (81,741)
-------------------------------------------------------------------------

(152,020) (399,674) (159,432) (225,787)
-------------------------------------------------------------------------

Income (Loss) before
income taxes (179,552) (319,898) (124,569) (361,240)

Income Taxes
Current (104,000) - (28,000) -
Reduction as a
result of applying
non-capital
losses carried
forward against
the current period's
taxable income 104,000 - 28,000 -
-------------------------------------------------------------------------

NET (LOSS) INCOME FOR
THE PERIOD (179,552) (319,898) (124,569) (361,240)

Deficit, beginning of
period (2,003,374) (1,605,637) (2,058,357) (1,564,295)
-------------------------------------------------------------------------

Deficit, end of
period $(2,182,926) $(1,925,535) $(2,182,926) $(1,925,535)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net (loss) income
per share:
Basic $ (0.005) $ (0.009) $ (0.003) $ (0.010)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Diluted $ (0.005) $ (0.009) $ (0.003) $ (0.010)
-------------------------------------------------------------------------
-------------------------------------------------------------------------


CEAPRO INC.
Consolidated Statements of Net (Loss) Income and Deficit
Unaudited

Nine Months Ended Quarters Ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenue
Sales $ 2,074,388 $ 1,657,754 $ 654,065 $ 349,080
Cost of goods sold 876,743 836,776 236,591 223,271
-------------------------------------------------------------------------
Gross margin 1,197,645 820,978 417,474 125,809
Royalties, licenses,
and product
development fees 80,000 292,758 - 65,258
-------------------------------------------------------------------------
1,277,645 1,113,736 417,474 191,067
-------------------------------------------------------------------------
Expenses
General and
administration 728,329 633,680 206,164 215,043
Royalties 245,358 225,650 68,236 45,984
Sales and marketing 174,261 95,791 54,675 35,142
Amortization 119,667 62,481 40,847 22,752
Interest on long-term
and callable debt 35,110 10,583 12,584 5,885
Interest on
convertible
debentures and other 2,452 5,775 105 1,714
-------------------------------------------------------------------------
1,305,177 1,033,960 382,611 326,520
-------------------------------------------------------------------------
Income (loss) from
operations (27,532) 79,776 34,863 (135,453)
-------------------------------------------------------------------------
Other income (expenses)
Research and product
development (368,702) (248,165) (141,475) (136,828)
Loss on disposal of
property and
equipment - (12,389) - (7,218)
Other income
(expenses) 216,682 (139,120) (17,957) (81,741)
-------------------------------------------------------------------------
(152,020) (399,674) (159,432) (225,787)
-------------------------------------------------------------------------
Income (Loss) before
income taxes (179,552) (319,898) (124,569) (361,240)

Income Taxes
Current (104,000) - (28,000) -
Reduction as a
result of applying
non-capital
losses carried
forward against
the current period's
taxable income 104,000 - 28,000 -
-------------------------------------------------------------------------
NET (LOSS) INCOME FOR
THE PERIOD (179,552) (319,898) (124,569) (361,240)

Deficit, beginning of
period (2,003,374) (1,605,637) (2,058,357) (1,564,295)
-------------------------------------------------------------------------
Deficit, end of
period $(2,182,926) $(1,925,535) $(2,182,926) $(1,925,535)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net (loss) income
per share:
Basic $ (0.005) $ (0.009) $ (0.003) $ (0.010)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Diluted $ (0.005) $ (0.009) $ (0.003) $ (0.010)
-------------------------------------------------------------------------
-------------------------------------------------------------------------



CEAPRO INC.
Consolidated Statements of Cash Flows
Unaudited

Nine Months Ended Quarters Ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Operating Activities
Net (loss) income
for the period $ (179,552) $ (319,898) $ (124,569) $ (361,240)
Items not affecting
cash
Amortization 119,667 62,481 40,847 22,752
Loss on disposal
of property and
equipment - 12,389 - 7,218
Stock based
compensation 49,945 18,434 48,147 572
-------------------------------------------------------------------------

(9,940) (226,594) (35,575) (330,698)

Changes in Non-Cash
Working Capital Items
Accounts receivable (762) 382,165 220,769 684,458
Inventories 113,796 (248,227) 38,796 (190,821)
Prepaid expenses and
deposits (38,846) (7,544) (53,313) 54,481
Deferred charges 50,000 - 75,000 -
Accounts payable and
accrued liabilities (304,778) 124,926 (281,959) (106,143)
Deferred revenue (80,000) - - -
------------------------------------------------------------------------

(270,530) 24,726 (36,282) 111,277
-------------------------------------------------------------------------

Investing Activities
Purchase of property
and equipment (73,839) (327,280) (11,035) (269,158)
Restricted cash for
the purchase of
property and equipment 60,915 - 11,035 -
-------------------------------------------------------------------------

(12,924) (327,280) - (269,158)
-------------------------------------------------------------------------

Financing Activities
Repayment of long-term
debt (20,306) 153,675 (7,755) 193,098
Repayment of callable
debt (29,929) - (10,163) -
Repayment of
convertible debenture (20,000) (10,000) - (10,000)
Proceeds from issuance
of share capital 204,800 - - -
Proceeds from exercise
of stock options 89,861 43,587 80,361 16,537
Increase (decrease) in
royalties payable 81,779 (29,546) (17,460) (77,134)
-------------------------------------------------------------------------

306,205 157,716 44,983 122,501
-------------------------------------------------------------------------

Increase (decrease) in
cash 22,751 (144,838) 8,701 (35,380)
Cash at beginning of
period 96,266 248,443 110,316 138,985
-------------------------------------------------------------------------

Cash at end of period $ 119,017 $ 103,605 $ 119,017 $ 103,605
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Supplementary
information:
Interest paid $ 41,014 $ 14,233 $ 12,689 $ 4,304

Contact Information

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