Gourmet Ocean Products Inc.
TSX VENTURE : GOP

Gourmet Ocean Products Inc.

August 28, 2015 12:26 ET

Gourmet Ocean Products Announces Financial Results for the Three and Nine Months Ending June 30th, 2015

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 28, 2015) - Gourmet Ocean Products Inc. ("Gourmet" or the "Company") (TSX VENTURE:GOP) announces its financial and operating results for the three and nine months ended June 30, 2015.

Highlights

  • In the nine months ended June 30, 2015, Gourmet reported sales of $4.2 million, compared with $3.4 million during the same period of last year. This increase is due to the increase in the sales of sea cucumbers.

  • The sale of sea cucumber during the first nine months of this year represents distribution sales, which is not comparable, from a gross margin perspective, to the seed sales achieved during the corresponding period of 2014. This is seen by the average gross margin of 21% achieved during the nine months ended June 30, 2015 compared with 86% achieved from the seed sales during the corresponding period of 2014.

  • Adjusted EBITDA for the nine months ended June 30, 2015 was negative $1 million versus positive $1.8 million during the corresponding period in 2014.

  • Net loss for the nine months period ended June 30, 2015 was $1.5 million, compared to breakeven during the same period last year.

  • The Company has also successfully settled our hatchery rental arrangements and entered into a formal new lease agreement which will expire in 2018.

Financial performance has been impacted by the slow summer season sales and the deteriorating economic conditions in China. However, "we are pleased to report periodical revenue and that the Company can supply our products to customer's year around as required." stated Mr. Peter Hughes, President and CEO of Gourmet Ocean Products.

SUMMARY OF FINANICAL RESULTS

Three-Month Period Ended
(Unaudited)
Nine-Month Period Ended
(Unaudited)
06/30/2015 06/30/2014 06/30/2015 06/30/2014
Sales 810,885 - 4,194,071 3,448,810
Gross profit 172,628 - 879,306 2,966,119
Income (loss) from operations (440,033 ) (732,143 ) (1,459,537 ) 1,843,291
Income taxes (recovery) - (60,197 ) - 6,708
Net income (loss) (442,577 ) (549,725 ) (1,461,057 ) (13,397 )
EBITDA (365,272 ) (645,626 ) (1,241,532 ) (61,599 )
Earnings per share
Diluted (0.004 ) (0.005 ) (0.012 ) (0.000 )
Weighted average number of shares
Basic 125,068,733 124,688,540 124,924,733 108,493,658

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2015 the Company had cash on deposit in the amount of $17,441, accounts and other receivables of $1,194,149, prepaid expenses of $84,142 and inventory of $3,683,942 compared to cash on deposit in the amount of $2,189,183, accounts and other receivables of $272,690, prepaid expenses of $403,093 and inventory of $2,573,129 at September 30, 2014.

The working capital position of the Company at June 30, 2015 declined to $3,946,525 compared to a working capital position of $5,051,110 at September 30, 2014.

Net assets declined to $5,015,167 at June 30, 2015 compared to $6,255,407 at September 30, 2014. At June 30, 2015 the Company had a short-term debenture of $845,400 at an interest rate of 12% per annum. The debentures are unsecured, non-convertible and have a renewed maturity date of October 31, 2015.

OUTLOOK

Fall and winter season are always the peak time for the consumers to consume our products. After September 15, 2015, we expect our revenue to improve as the strong demand of our products for Chinese National Day. In addition, the Company is looking forward to expand its commercial product catalogue and potential revenue will not be significantly impacted by the seasonality.

Despite the deteriorating economic conditions in China, we believe that the demand for premium seafood among worldwide customers will remain strong. The Company has also expanded its operations by adding oyster seed production to its existing shellfish business and generated revenue from oyster seeds sales this summer. Gourmet will continue to utilize its experience and existing facility in Courtney, BC, to supply oyster seeds to growers in British Columbia.

For additional financial information please see Gourmet's unaudited condensed interim consolidated financial statements and MD&A filed on SEDAR at www.sedar.com.

About Gourmet Ocean Products Inc.

Gourmet is a B.C.-based aquaculture company specializing in the production, distribution, marketing and sale of high-quality specialty seafood products including sea cucumbers, scallops, oyster and goeduck with distribution to customers primarily in Asia and Canada.

ON BEHALF OF THE BOARD

Peter Hughes, President, Chief Executive Officer

GOURMET OCEAN PRODUCTS INC.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities by the Company to be made in the United States will be made by means of a prospectus, which may be obtained from the Company and will contain detailed information about the Company and its management, as well as financial statements.

Forward-Looking Statements

Certain of the statements made and information contained in this press release constitute forward-looking information within the meaning of applicable securities legislation. Forward-looking statements in this press release include that (a) the Company will collect the $3,619,984 in accounts receivable, (b) the Company has adequate capital to grow its business and execute on its business plan, (c) continued growth in revenues is expected from contracts with aquaculture farmers and distributors and (d) Gourmet's will become a global leader in aquaculture. All information and statements which are not historical fact constitute forward-looking information and, in many cases, can be identified by words such as "proposed", "may", "will", "expect", "intend", "anticipate", "believe", "estimate", "potential", or other similar terminology. Forward-looking statements involve risks, assumptions, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements made in this press release include: products that are or become available from competitors, political and economic factors, including in China and environmental factors. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Company may vary materially from those described in this press release. Accordingly, readers are advised not to place undue reliance on forward looking information. Except as otherwise required by law, the Company does not intend to and assumes no obligation to update or revise forward looking information, whether as a result of new information, plans, events or otherwise.

Contact Information

  • Gourmet Ocean Products Inc.
    Peter Hughes
    President, Chief Executive Officer
    604.802.7372
    petehughes@me.com