DoveCorp Enterprises Inc.
TSX VENTURE : DOV

DoveCorp Enterprises Inc.

August 29, 2005 18:49 ET

Dovecorp Announces Q3 Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 29, 2005) - DoveCorp Enterprises Inc. (TSX VENTURE:DOV), one of Canada's leading dry cleaning and laundry service companies, today announced its third quarter results. The quarter reflected the acquisition and going public activities (RTO) of the quarter, the latter completed on June 28, 2005.

DoveCorp's revenues for the quarter were $1.55 million, versus $1.84 million in the same quarter of the prior year. For the nine months, revenues were $4.28 million, compared to $5.07 million in the same period of the prior year. The decrease in sales is primarily a result of the resistance to formalization and regularization of certain commercial contracts from a previous acquisition. Subsequent to the quarter end, these revenues are in the process of being replaced with new commercial contracts. Revenue from dry cleaning operations in the three months ended June 30, 2005 increased compared to the corresponding period in the prior year.

Cost of sales rose slightly in the quarter to $1.64 million from $1.62 million in the same quarter in fiscal 2004. In the nine months, cost of sales rose to $4.65 million from $4.46 million for the same period in the previous year. Some of the synergies of previous acquisitions are beginning to contribute to results, but there were still relatively high costs related to the opening of DoveCorp's new, 42,000-square-foot cleaning and administrative facility, which opened in early 2005.

Expenses in the quarter rose to $1.25 million from $0.51 million in fiscal 2004. In the nine months, expenses rose to $2.61 million from $1.84 million in the same period in the previous year. The increase related primarily to start-up expenses in the new facility, costs of going public and associated bank and loan arrangement costs.

DoveCorp's loss in the quarter was $1.34 million, versus $0.29 million in the prior year. In the nine months, the loss reached $2.98 million, compared to $1.24 million for the same period in the prior year. As above, the loss related primarily to the integration of acquisitions, the costs of going public, and the start-up of the new facility.

Events Subsequent To the End of the Quarter:

On August 11, 2005 DoveCorp completed the acquisition of Cadet Cleaners, a retail and commercial dry cleaning service including 45 franchised and three corporate owned locations under the "Cadet Cleaners" retail banner and 16 franchised and 3 corporate dry cleaning locations operating as Factory Outlet Cleaners. With reported revenues in 2004 of more than $4.0 million and earnings before income taxes of approximately $0.4 million, the Cadet acquisition significantly adds to DoveCorp's top line. In addition, it is anticipated that integration savings will result from this acquisition.

"By going public, DoveCorp has begun its strategic move to the next stage of its growth," Sam Mizrahi, President and CEO of DoveCorp, said. "With our acquisition of Cadet Cleaners, we have added not only Cadet's sales, but the strengths of Jim and Gus Karagiannis as part of our management team. This acquisition is a significant step in our plan, and we are currently working to ensure that the anticipated synergies are quickly realized. We continue to seek accretive acquisitions."

About DoveCorp:

DoveCorp is a leader in Canada's dry-cleaning and laundry industry, with the only ISO 9001 dry cleaning registration in the world. For more than 10 years, its flagship Dove Cleaners division has been widely recognized by various fashion and industry magazines as the best premium dry cleaners and laundry in Canada. At the same time, its Dove Depot, Meena Cleaners, and Natural Cleaners divisions excel in the mass market. DoveCorp's recent acquisition of Cadet Cleaners, an industry leader for 50 years, has brought the number of DoveCorp's retail locations to 96, with 24 more anticipated to open within the next two years. In addition, Dove Cleaners Commercial is a full-service provider of linen, uniforms, and mat rentals. The company also provides out-sourced dry cleaning and laundry services.

With scalable technology and proven management, highly efficient operational and quality control systems, and a 42,000-square-foot production facility, DoveCorp believes that it will continue not only to be an industry consolidator but to expand by organic growth.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved of the contents of this release. The TSX Venture Exchange has in no way passed on the merits of the transaction described herein.

Forward-looking statements

This document contains forward-looking statements relating to DoveCorp's financial performance, operations or to the environment in which it operates, which are based on DoveCorp's operations, estimates, forecasts, and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the company's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the company's corporate filings, (posted at www.sedar.com). Consequently, readers should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, DoveCorp cannot be certain that actual results will be consistent with these forward-looking statements, and the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact Information

  • DoveCorp Enterprises Inc.
    Sam Mizrahi
    President and CEO
    (416) 782-8788 x 223
    sam@dovecorp.com
    or
    Ciris Investor Relations
    Robin Sundstrom
    President
    (416) 368-8770 x223