Consolidated Envirowaste Industries Inc.

Consolidated Envirowaste Industries Inc.

April 03, 2007 18:18 ET

Consolidated Envirowaste Reports 2006 Annual Results

ABBOTSFORD, BRITISH COLUMBIA--(CCNMatthews - April 3, 2007) -

Consolidated Envirowaste Industries Inc. (TSX VENTURE:CWD) announced today its results for the year ended September 30, 2006. A complete copy of the Company's audited annual financial statements and accompanying management's discussion and analysis is available on SEDAR at Excerpts from the annual audited financial statements are as follows:

September 30 2006 2005
Total Revenues $29,951,147 $29,051,027

Net income from continuing operations $ 985,132 $ 904,372

Earnings per share-basic $ 0.09 $ 0.09
Earnings per share-diluted $ 0.09 $ 0.09

Net income for the year $ 985,132 $ 928,371

Earnings per share-basic $ 0.09 $ 0.09
Earnings per share-diluted $ 0.09 $ 0.09

Weighted average number of common shares
outstanding-basic 10,383,096 10,335,083
Weighted average number of common shares
outstanding-diluted 10,576,148 10,481,715

The Company recorded a 6% increase in net income to $985,132 or $0.09 per share ($0.09 per share diluted) for the year ended September 30, 2006, compared to $928,371 or $0.09 per share ($0.09 per share diluted) for the year ended September 30, 2005. Momentum from private sector demand and storm revenue earned in the Company's Florida operations in the first six months outweighed the effects of the slowing U.S. economy and the continuing rise of the Canadian dollar late in the year to provide the Company with continued revenue and earnings growth for fiscal 2006.

Overall revenue increased $900,120 or 3.1% compared to the previous year. Revenue in the Company's core Florida operations for 2006 improved 6% or US$1,287,001 over 2005, however, the increase was reduced by unfavourable currency translation. A slowdown in the Florida economy began to have its effect on revenue during the third quarter, and the absence of storm activity in the fourth quarter dragged down impressive revenue growth in the first two quarters of 2006 compared of fiscal 2005. Stronger demand and sales of product to a customer under a long-term supply agreement increased the Company's Canadian operations' revenues by 41% or $1,152,176 over 2005 revenues, increasing capacity utilization and margins, thereby reducing losses compared to last fiscal year.

Very dry summer conditions in Florida reducing the billable weight of materials to be processed, lower capacity utilization in the latter half of the year and the inflationary pressure of rising fuel prices caused margins to decline slightly.

Continued healthy cash flows from operating activities allowed the Company to strengthen its balance sheet through debt reduction and maintain operating efficiency with equipment upgrade programs.

In October 2006, in order to benefit from efficiencies associated with having the financial statements of the Company's Canadian and U.S. operations audited by a single firm, the Company appointed Grant Thornton LLP, which had been the auditor of the Company's U.S. subsidiaries, as the Company's auditor for the fiscal year ended September 30, 2006. During the course of this year's audit, it became apparent that certain errors had occurred in the preparation of our September 30, 2005 financial statements. The Company has restated its consolidated balance sheet and statement of cash flows for the comparative 2005 fiscal year to correct those errors. The details of the restatements and the resultant effects are summarized in Note 1 to the consolidated financial statements for the year ended September 30, 2006 and discussed in the accompanying management's discussion and analysis. Briefly, the Company has restated the value of certain assets of its U.S. subsidiaries, resulting in the reduction of shareholders' equity as at September 30, 2005 by $1,582,876. The restatement of the comparative statement of cash flows for the year ended September 30, 2005 involved the separate presentation and disclosure of the effects of foreign currency translation from cash flows derived from its U.S. subsidiaries, non-cash financing and investing activities, and the correction of misclassifications within categories of the cash flows statement. The restatements had no effect on the Company's current or prior year's operating results or earnings per share.

The need to work through the restatement approval process with the Company's former and current auditors has significantly delayed the filing of the 2006 audited annual financial statements and the interim unaudited financial statements for the first quarter of fiscal 2007, and resulted in the imposition of cease-trade orders by the applicable securities regulators. The Company is working expeditiously to file its 2007 first quarter results, which will contain similar comparative period restatements, within the next few days and will apply immediately thereafter to have the cease-trade order lifted.

The Company faces a challenging period of operational adjustments needed to match the continuing slowdown in the Florida economy. The relative absence of storm activity and cool dry weather which continues to affect billable tonnage in Florida this fall and winter are expected to return the Company's operating results to its usual seasonal patterns during the first quarter of fiscal 2007.

Consolidated Envirowaste Industries Inc. is a leading processor of wood and other organic wastes in Western Canada and Florida. The Company markets and supplies biomass boiler fuel for electric generation facilities, charcoal manufacturers and pulp and paper mills in the U.S., bulk landscaping products in both of these regions, and packaged soil products to major Western Canadian retailers.

Forward-Looking Statements This report contains statements that are forward-looking in nature. Readers are cautioned that such forward-looking statements are not guarantees and may involve known and unknown risks and uncertainties that could cause the actual results of the Company to be materially different from those expressed or implied by those forward-looking statements. Such risks include, among others: general economic and business conditions, weather factors, competition, product selling prices, the cost and availability of raw materials, operating costs, changes in foreign currency exchange rates, dependence on contracts, the regulatory environment, seasonality, risk of liability for environmental damage, risks associated with litigation, and concentration of shareholder control. For a fuller description of those risks, please see the sections headed "Critical Accounting Estimates" and "Risk Factors" in management's discussion and analysis for the fiscal year ended September 30, 2006, a copy of which is available under the Company's name on SEDAR at

Consolidated Envirowaste Industries Inc.

James E. Darby, Chairman and Chief Executive Officer

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

Contact Information

  • Consolidated Envirowaste Industries Inc.
    James E. Darby
    Chairman and Chief Executive Officer
    (604) 856-6836
    (604) 856-5644 (FAX)