Consolidated Envirowaste Industries Inc.
TSX VENTURE : CWD

Consolidated Envirowaste Industries Inc.

April 13, 2007 17:35 ET

Consolidated Envirowaste Reports 2007 1st Quarter Results

ABBOTSFORD, BRITISH COLUMBIA--(CCNMatthews - April 13, 2007) -

Consolidated Envirowaste Industries Inc. (TSX VENTURE:CWD) announced today its results for the three months ended December 31, 2006. A complete copy of the Company's unaudited interim financial statements and accompanying management's discussion and analysis is available on SEDAR at www.sedar.com. Excerpts from the first quarter unaudited financial statements are as follows:



For the three months ended December 31 2006 2005
---------------------------------------- ----------- -----------

Revenues $ 4,846,175 $ 7,754,604

Net income (loss) for the period $ (418,418) $ 318,952

Earnings (loss) per share-basic $ (0.04) $ 0.03

Earnings (loss) per share-diluted $ (0.04) $ 0.03

Weighted average number of common shares
outstanding-basic 10,414,699 10,364,699

Weighted average number of common shares
outstanding-diluted 10,562,353 10,552,645


The Company recorded a first quarter loss of $418,418 or $0.04 per share ($0.04 per share diluted) for the three months ended December 31, 2006. This compared to net income of $318,952 or $0.03 per share ($0.03 per share diluted) for the three months ended December 31, 2005. That decline in income is directly attributable to reduced revenues in the Company's dominant Florida operation. Calm, dry conditions coupled with the economic slowdown in the Florida region reduced the Company's primary source of revenue-tipping and processing fees-by 41%, reducing overall revenue by $2.9 million to $4,846,175 for the quarter ended December 31, 2006 compared to $7,754,604 for the quarter ended December 31, 2005.

Excess production capacity reduced operating margins in the first quarter of fiscal 2007 by 11% compared to the first quarter of fiscal 2006 as the Company adjusted its operations to meet lower demand, trimming administrative overhead by nearly 20% on a comparative basis.

Late 2005 was marked by severe storms in Florida, with the result that CRR Florida was very actively engaged in storm debris clean-up during the first quarter of fiscal 2006. The effect of this activity on working capital items together with the Company's loss in the first quarter of fiscal 2007 reflect the significant reversal in cash flows derived from operating activities from $1,867,633 provided by operating activities during the three months ended December 31, 2005 to $28,096 in cash flows used in operating activities during the three months ended December 31, 2006. The available capacity during the first quarter of 2007 allowed CRR Florida to work through its backlog of unprocessed material on hand to reduce related deferred revenues to their lowest levels in several years. The contrast to the build-up of material during the very busy quarter ended December 31, 2005 accounted for one-third of this negative swing, or $622,135 in cash flows used in operating activities.

As previously announced, the Company restated its Consolidated Balance Sheet and its Consolidated Statement of Cash Flows for the 2005 fiscal year to correct certain errors in those financial statements which were identified during the course of the audit of the 2006 annual financial statements. As the ensuing quarterly statements were prepared on the same basis as the 2005 annual financial statements, they contained similar errors. Accordingly, the Company has restated the first quarter comparative financial statements for the three months ended December 31, 2005 in the preparation of the financial statements for the three months ended December 31, 2006.

Immediately following the filing of these financial statements, the Company will apply to the regulatory bodies to lift the outstanding cease trade orders.

The Company is in the midst of a challenging period of operational adjustments needed to match the continuing slowdown in the Florida economy. Cool, dry weather in Florida has affected billable tonnage in Florida this winter and early spring. As well, cold and wet weather conditions in the Canadian West Coast and Prairie regions are expected to have a detrimental effect on both Canadian revenues and productivity in the second quarter.

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 three months ended December 31, 2006, a copy of which is available under the Company's name on SEDAR at www.sedar.com.

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)