DoveCorp Enterprises Inc.
TSX VENTURE : DOV

DoveCorp Enterprises Inc.

May 31, 2006 06:30 ET

DoveCorp Announces Results for First Six Months 2006

TORONTO, ONTARIO--(CCNMatthews - May 31, 2006) - DoveCorp Enterprises Inc. (TSX VENTURE:DOV), a leader in Canada's dry cleaning and laundry industry, today announced its financial results for the first six months of the 2006 fiscal year.

A net loss of $3.1 million, or 4 cents per common share was recorded for the first six months of fiscal 2006, compared to 4 cents per common share and a net loss of $1.6 million reported for the same period in fiscal 2005. As well, sales for the first six months of fiscal 2006 totalled $5.0 million, an 83% increase over the same period in 2005.

Sam Mizrahi, President and CEO said, "We continued to incur losses during the consolidation and ramp-up phase of our business plan. During the quarter ended March 31, 2006 we completed the move of all outsourced services and the operations of the Cadet facility into our main processing facility. While the moves are complete, we continue to focus on much needed cost reduction opportunities. Our recent sales and marketing initiatives are starting to add value during and subsequent to the quarter, we have been successful in attracting a number of high quality new clients. We continue to make positive steps in executing our business plan"

During the quarter ended March 31, 2006, the company was successful in :

- Signing a five-year national co-branding agreement with International News. This agreement is expected to create a number of new retail locations for the company, continuing the expansion of the brands.

- Consolidating the Cadet Cleaners operations and other outsourced operations into the new facility. Cost reductions continue to be achieved.

- Signing a number of large commercial contracts, in the hospitality industries.

- Installing new retail dry cleaning equipment, including a two-story conveyor sorting system and state-of-the-art Fuji Star shirt presses. These presses are expected to substantially improve the unit costs of processing while significantly improving product quality and throughput.

Subsequent to March 31, 2006 the company successfully:

- Raised $2.7 million in equity and debt financing, which materially improved its working capital position

- Installed new commercial laundry equipment, including two new Jenson ironing systems, which are expected to continue to improve the unit cost of processing while significantly improving both product quality and throughput.

- Announced the addition of a number of new commercial customers.

The Company also announced that Wayne Fraser CMA, who is currently Dovecorp's Corporate Controller has assumed increasing responsibility with respect to accounting and financial reporting, and will now be signing the Certification of Interim Filings. Greg Van Staveren has reduced his role in respect of such responsibilities but will continue to provide strategic financial services to Dovecorp.

Full financial results are available on both Sedar (www.sedar.com) and on the company's website www.dovecorp.com.

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 among the best premium dry cleaning and laundry services 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, a leader in the Greater Toronto Area for 50 years, has brought the number of DoveCorp's retail locations to 98. 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.

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.

In particular, statements pertaining to DoveCorp's growth prospects as a result of the announced agreement are based primarily on anticipated store openings by International News, which may be impeded by such factors as the economy, availability of capital, management's ability to deliver on its promises, and other considerations, such as those outlined in DoveCorp's corporate filings on SEDAR. DoveCorp based its reliance on estimates of International News' growth on that company's historical growth rates, International News' management estimates of growth, and past performance. Past performance is not indicative of future results.

Contact Information

  • DoveCorp Enterprises Inc.
    Sam Mizrahi
    President and CEO
    (416) 782-8788 x 223
    sam@dovecorp.com
    or
    DoveCorp Enterprises Inc.
    Christopher Hunt
    Director of Communications
    (416) 782-8788 x 262
    chris.hunt@dovecorp.com