PharmEng International Inc.
TSX VENTURE : PII

PharmEng International Inc.

August 23, 2006 09:00 ET

PharmEng Reports Second Quarter Earnings for 2006

TORONTO, ONTARIO--(CCNMatthews - Aug. 23, 2006) - PharmEng International Inc. (TSX VENTURE:PII), a full-service consulting and contract manufacturing company, today reported its results for the period ended June 30, 2006.

The Company, while investing in the pharmaceutical manufacturing operations, continues its consulting revenue growth in Canada, the USA and internationally.

- For the three-month period ended June 30, 2006, the Company had revenues of $2,371,000 on a consolidated basis.

- Consulting fee revenues for the second quarter 2006 were $1,968,000, an increase of 13% over the previous quarter. Margins on consulting revenue in the second quarter of 2006 were 46%, compared to margins of 30% in the previous quarter.

- Revenues from Keata, the Company's pharmaceutical manufacturing facility, for the three-month period ended June 30, 2006 was $403,000, an increase of 10 % over the previous quarter. Margins on the Keata business continue to be negative reflecting under utilization of the manufacturing capacity although current bookings (unfilled orders) and anticipated customer orders are expected to provide positive gross margins for Keata in the remaining quarters of the year.

- Net loss after taxes for the three months ended June 30, 2006 was $503,000. The loss was expected due to continued expenditures to build the manufacturing business.

- Subsequent to June 30, 2006, the Company completed financing for a (US) $7.0 million convertible debt facility and an equity private placement for (CDN) $1.8 million.

"Our second quarter continued to demonstrate that our consulting business is growing steadily in all geographic regions. We were, however, detracted from focusing solely on operations by our continued financing activities that are now complete," commented Alan Kwong, CEO and Chairman of PharmEng. "With the financing behind us, we can now concentrate on building the Keata business and ensuring a timely and on budget completion of our new pharmaceutical manufacturing facility in Nova Scotia", concluded Mr. Kwong.

The following are financial highlights for the quarter ending June 30, 2006.

 

Selected Financial Highlights:

Consulting Manufac- Intercompany
turing Elimination Total
(000's) $ $ $ $
Three months to June 30, 2006:
Assets 2,052 6,132 (293) 7,891
Revenue 1,968 403 - 2,371
Amortization 15 100 - 115
Interest expense 42 11 - 53
Earnings (loss) before taxes 169 (510) (396) (738)
Income tax expense (benefit) 79 (171) (143) (235)


Business Highlights in the First Quarter

- PharmEng extends vertical integration strategy and acquires Rootlink Tecknic Inc., a laboratory instrumentation automated solution sales and service company based in Toronto, Ontario.

- PharmEng continues to build its management team by hiring Lawrence Tjan as the Chief Financial Officer

About PharmEng International Inc.

PharmEng International Inc., headquartered in Toronto, Canada, is a full-service consulting and contract manufacturing company that serves the pharmaceutical and biotechnology industries in North America and internationally. Consulting services include project management, engineering, GMP, validation, calibration, regulatory compliance and certified training. Contract manufacturing includes pharmaceutical support, formulation development, laboratory testing, and finished solid dosage and liquid products. PharmEng's shares trade on the TSX Venture Exchange under the symbol PII. For more information about PharmEng, please visit the Company's website at www.pharmeng.com.

FORWARD LOOKING STATEMENTS

Certain statements in this press release may include "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of PharmEng to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "may", "will", "expect", "anticipate", "project", "believe", "plan", and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by PharmEng with the securities regulatory authorities in all of the provinces and territories of Canada. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of PharmEng to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction actual results.

Contact Information

  • PharmEng International Inc.
    Charles Ivey
    Vice President
    (905) 415 3922 x 116