CEAPRO INC.
TSX VENTURE : CZO

CEAPRO INC.

November 14, 2006 09:00 ET

Ceapro announces 2006 third quarter financial results

EDMONTON, Nov. 14 - Ceapro Inc. (TSX VENTURE:CZO) today released its
third quarter financial results for 2006. Ceapro produced solid financial
results with strong performance in sales and margins. Revenues for the third
quarter increased 17% to $762,000. Net earnings before interest, amortization,
taxes, and royalties increased to $24,000 from a loss of $3,000 in 2005. The
net loss for the quarter was $96,000 reduced 23% from $125,000 in 2005
resulting in a loss per share of $0.00.

Third quarter sales contributed to strong performance for the year to
date. Revenue from product sales rose 26% to $2.6 million resulting in income
from operations of $128,000, compared to an operating loss of $28,000 in the
first nine months of last year. Net earnings before interest, amortization,
taxes, and royalties increased 9% to $244,000. Foreign exchange losses and
research and product development expenses resulted in a net loss over the
first nine months. Gross margins remained strong at 58% of sales revenue,
primarily as a result of higher product sales, greater economies of scale, and
improvements in process efficiency.

"We are pleased to report that Ceapro continues to grow its business with
the best sales to date for a third quarter resulting in our best nine month
performance," said Dr. Mark Redmond, President and CEO of Ceapro. "We have
sold more active ingredients in each of the first three quarters than ever
before. This success comes from strong relationships with our partners and the
dedication and hard work of the Ceapro manufacturing team. We continue to
execute our business plan with initiatives focused on increasing our
production capacity, expanding markets, and developing new technologies to
open up new business opportunities for the future."


Third Quarter Highlights



- Revenues climbed 17% to $762,000
- Sales of active ingredients up 12%
- Net loss of $96,000 reduced from $125,000 in 2005
- Working capital of $794,000
- Gross margins of 56%


Outlook

Our objective for the next 12 to 18 months is to further increase
revenues and utilize cash flow on a discretionary basis to enhance the scale
of operations. As a strategic focus, we continue to concentrate on increasing
sales and developing new opportunities, with emphasis placed on securing new
pharmaceutical and personal care customers to use our active ingredients and
launching our veterinary products in the United States. We are introducing
CeaProve® to North American corporations as part of corporate wellness
programs, and to healthcare providers internationally for point-of-care
diagnosis of diabetes and impaired glucose tolerance.

Ceapro advises that its 2006 third quarter report, which includes
management's discussion and analysis and unaudited financial statements is
being filed today with securities regulators and will be available on
www.sedar.com and on the Company's website at www.ceapro.com.

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, support the use of our extracts in products for human and animal
health, and introduce 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, visit our website at
www.ceapro.com. Shares Outstanding: 37,461,670, Recent Close: $0.30.

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
2006 2005
(Unaudited) (Audited)
-------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 413,880 $ 438,045
Accounts receivable 432,192 982,347
Inventories 171,451 228,158
Prepaid expenses and deposits 247,161 90,761
-------------------------------------------------------------------------

1,264,684 1,739,311

PROPERTY AND EQUIPMENT (NET OF
ACCUMULATED AMORTIZATION) 720,645 679,623
-------------------------------------------------------------------------

$ 1,985,329 $ 2,418,934
-------------------------------------------------------------------------
-------------------------------------------------------------------------

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 259,318 $ 284,863
Deferred revenue 0 229,676
Callable debt 47,960 81,584
Current portion of long-term debt 26,560 33,519
Currrent portion of royalties payable 136,658 106,508
-------------------------------------------------------------------------

470,496 736,150

DEFERRED ROYALTY REVENUE 427,220 457,000
EMPLOYEE FUTURE BENEFITS OBLIGATION 203,842 159,946
LONG-TERM DEBT 418,830 436,731
ROYALTIES PAYABLE 139,808 167,770
-------------------------------------------------------------------------

1,660,196 1,957,597
-------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

SHARE CAPITAL 2,421,524 2,414,830
CONTRIBUTED SURPLUS 114,932 106,888
DEFICIT (2,211,323) (2,060,381)
-------------------------------------------------------------------------

325,133 461,337
-------------------------------------------------------------------------

$ 1,985,329 $ 2,418,934
-------------------------------------------------------------------------
-------------------------------------------------------------------------



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

Nine Months Ended Quarters Ended
September 30 September 30
2006 2005 2006 2005
----------------------------------------------- -------------------------

Revenue
Sales $ 2,606,565 $ 2,074,388 $ 762,323 $ 654,065
Cost of goods sold 1,103,444 876,743 334,644 236,591
----------------------------------------------- -------------------------

Gross margin 1,503,121 1,197,645 427,679 417,474
Royalties, licenses,
and product
development fees - 80,000 - -
----------------------------------------------- -------------------------

1,503,121 1,277,645 427,679 417,474
----------------------------------------------- -------------------------

Expenses
General and
administration 726,511 728,329 214,124 206,164
Royalties (net) 250,864 245,358 72,024 68,236
Sales and marketing 253,668 174,261 99,387 54,675
Amortization 108,892 119,667 36,930 40,847
Interest on
long-term debt 30,589 28,981 10,013 10,727
Interest on callable
debt and other 5,068 8,581 1,136 1,962
----------------------------------------------- -------------------------

1,375,592 1,305,177 433,614 382,611
----------------------------------------------- -------------------------

Income (loss) from
operations 127,529 (27,532) (5,935) 34,863
----------------------------------------------- -------------------------

Other income (expenses)
Research and product
development (259,523) (368,702) (110,789) (141,475)
Other income
(expenses) (18,948) 216,682 20,496 (17,957)
----------------------------------------------- -------------------------

(278,471) (152,020) (90,293) (159,432)
----------------------------------------------- -------------------------

Income (Loss) before
income taxes (150,942) (179,552) (96,228) (124,569)

Income Taxes
Current 119,000 104,000 35,000 28,000
Reduction as a
result of applying
non-capital losses
carried forward
against the current
period's taxable
income (119,000) (104,000) (35,000) (28,000)
----------------------------------------------- -------------------------

NET (LOSS) INCOME
FOR THE PERIOD (150,942) (179,552) (96,228) (124,569)

Deficit, beginning
of period (2,060,381) (2,003,374) (2,115,095) (2,058,357)
----------------------------------------------- -------------------------

Deficit, end of
period $(2,211,323) $(2,182,926) $(2,211,323) $(2,182,926)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------

Net (loss) income
per share:
Basic $ (0.00) $ (0.00) $ (0.00) $ (0.00)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------
Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------



CEAPRO INC.
Consolidated Statements of Cash Flows
Unaudited
Nine Months Ended Quarters Ended
September 30 September 30
2006 2005 2006 2005
----------------------------------------------- -------------------------

Operating Activities
Net (loss) income
for the period $ (150,942) $ (179,552) $ (96,228) $ (124,569)
Items not
affecting cash
Amortization 108,892 119,667 36,930 40,847
Employee future
benefits
obligation 43,896 21,000 15,498 15,000
Recognition of
deferred royalty
revenue (29,780) - (8,710) -
Stock based
compensation 9,113 49,945 - 48,147
----------------------------------------------- -------------------------

(18,821) 11,060 (52,510) (20,575)

Changes in Non-Cash
Working Capital Items
Accounts receivable 550,155 49,238 271,425 295,769
Inventories 56,707 113,796 18,201 38,796
Prepaid expenses
and deposits (156,400) (38,846) (179,059) (53,313)
Accounts payable and
accrued liabilities (25,545) (325,778) (414,545) (296,959)
Deferred revenue (229,676) (80,000) 0 -
----------------------------------------------- -------------------------

176,420 (270,530) (356,488) (36,282)
----------------------------------------------- -------------------------

Investing Activities
Purchase of property
and equipment (149,914) (73,839) (129,840) (11,035)
Restricted cash for
the purchase of
property and equipment - 60,915 - 11,035
----------------------------------------------- -------------------------

(149,914) (12,924) (129,840) -
----------------------------------------------- -------------------------

Financing Activities
Repayment of
long-term debt (24,860) (20,306) (8,470) (7,755)
Repayment of
callable debt (33,624) (29,929) (11,424) (10,163)
Repayment of
convertible debenture - (20,000) - -
Proceeds from issuance
of share capital - 204,800 - -
Proceeds from exercise
of stock options 5,625 89,861 - 80,361
Increase (decrease)
in royalties payable 2,188 81,779 (33,332) (17,460)
----------------------------------------------- -------------------------

(50,671) 306,205 (53,226) 44,983
----------------------------------------------- -------------------------

Increase (decrease)
in cash (24,165) 22,751 (539,554) 8,701
Cash at beginning
of period 438,045 96,266 953,434 110,316
----------------------------------------------- -------------------------

Cash at end of period $ 413,880 $ 119,017 $ 413,880 $ 119,017
----------------------------------------------- -------------------------
----------------------------------------------- -------------------------

Supplementary
information:
Interest paid $ 35,927 $ 41,014 $ 11,149 $ 12,689
Royalties paid $ 278,458 $ 163,579 $ 114,065 $ 85,696

Contact Information

  • Mr. Branko Jankovic, Controller, Ceapro Inc.,
    Telephone: (780) 421-4555