Consolidated Envirowaste Industries Inc.
TSX VENTURE : CWD

Consolidated Envirowaste Industries Inc.

August 23, 2007 18:38 ET

Consolidated Envirowaste Reports 2007 3rd Quarter Results

ABBOTSFORD, BRITISH COLUMBIA--(Marketwire - Aug. 23, 2007) -

Consolidated Envirowaste Industries Inc. (TSX VENTURE:CWD) announced today its results for the nine months ended June 30, 2007. 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 third quarter unaudited financial statements are as follows:



Quarters Ended Nine Months Ended
---------------------------- ----------------------------
June 30, 2007 June 30, 2006 June 30, 2007 June 30, 2006
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Revenue $ 7,124,603 $ 8,291,398 $ 17,661,101 $ 24,737,669

Income (loss)
before income
taxes $ 148,447 $ 322,480 ($791,757) $ 2,343,830
Income (loss)
after income
taxes $ 250,209 $ 331,366 ($431,089) $ 1,395,712

Earnings (loss)
per share-
basic $ 0.02 $ 0.03 ($0.04) $ 0.13
Earnings (loss)
per share-
diluted $ 0.02 $ 0.03 ($0.04) $ 0.13

Weighted
average common
shares
outstanding-
basic 10,414,699 10,387,941 10,414,699 10,372,446
Weighted
average common
shares
outstanding-
diluted 10,438,032 10,576,418 10,438,032 10,560,923

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The Company recorded third quarter net earnings of $250,209 or $0.02 per share ($0.02 per share diluted) for the three months ended June 30, 2007. This compared to net income of $331,366 or $0.03 per share ($0.03 per share diluted) for the three months ended June 30, 2006. The Company's third quarter results continue to reflect the experiences of the first two quarters of fiscal 2007, as the Florida region record drought conditions and economic slowdown that began in the third quarter of fiscal 2006 affected all aspects of our operating results for the quarter. The Company's primary source of revenue-tipping and processing fees declined 22% reducing overall revenue by 14% or $1,166,795 from $8,291,398 for the three months ended June 30, 2006 to $7,124,603 for the quarter ended June 30, 2007. The combination of extremely dry conditions and excess production capacity in the Florida unit offset high seasonal activity in the Canadian operations, reducing operating margins by 1% compared to the third quarter of fiscal 2006 as the Company adjusted its operations to meet lower demand.

Revenue for the first nine months of fiscal 2007 fell nearly $7.1 million or 29% to $17,661,101 compared to revenues of $24,737,669 for the comparable period of 2006 reflecting the influence of lower revenues in the Company's Florida unit during period. The resulting reduction in margins caused the Company to record a net loss of $431,089 or $0.04 per share ($0.04 per share diluted) for the nine months ended June 30, 2007 compared to net income of $1,395,712 for the nine months ended June 30, 2006.

The change in activity levels and loss of contribution margin from the Florida unit's storm debris clean-up and robust economic conditions that prevailed during the first three quarters of fiscal 2006, reflect the changes in cash flows derived from operating activities in the comparable quarters. Cash flows provided by operating activities for the three months ended June 30, 2007 were $613,735 compared to $2,226,669 provided by operating activities for the same quarter of fiscal 2006. This change in operating activities is also prevalent in the Company's cash flows provided by operating activities for the nine months ended June 30, 2007 as cash flows provided by operating activities were $171,469 compared to cash flows generated from operating activities of $3,744,021 for the nine months ended June 30, 2006.

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 third quarter comparative financial statements for the three and nine months ended June 30, 2006 in the preparation of the financial statements for the nine months ended June 30, 2007.

The Company expects the fourth quarter to reflect seasonal operating patterns. Billable tonnage and revenues derived from the U.S. operations will continue to be affected by drought conditions and the state of the U.S. housing sector into the fourth quarter. It is unclear at this time how weather patterns will affect our fourth quarter operating levels and results. It also appears that the Canadian dollar will remain at or near present levels during the fourth quarter. The Company will continue to monitor activity and adjust its operations to meet anticipated demand in the final quarter of this fiscal year.

The Company also wishes to announce it has, through its Florida subsidiary, renewed a significant green waste processing contract with a local Florida county for a term of seven years under terms and conditions satisfactory to both parties.

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)