PharmEng International Inc.
TSX VENTURE : PII

PharmEng International Inc.

November 14, 2006 13:18 ET

PharmEng Reports Third Quarter Earnings for 2006

TORONTO, ONTARIO--(CCNMatthews - Nov. 14, 2006) - PharmEng International Inc. (TSX VENTURE:PII), a full-service consulting and contract manufacturing company, today reported its results for the period ended September 30, 2006.

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

- For the three-month period ended September 30, 2006, the Company achieved revenues of $2,592,000 on a consolidated basis compared to $2,043,000 for the same three-month period ended September 30, 2005. This increase of $549,000 represents an increase of 27% over the same period last year.

- Consulting fee revenues for the third quarter 2006 were $2,043,000, an increase of 34% over same three-month period ended September 30, 2005. Margins on consulting revenue in the third quarter of 2006 were 49%, compared to margins of 48% in the same quarter last year.

- Revenues from Keata, the Company's pharmaceutical manufacturing business, for the three-month period ended September 30, 2006 was $549,000, an increase of 36% 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 quarter of the year.

- Net loss after taxes for the three months ended September 30, 2006 was $188,000. The loss, although expected, continues a trend of improved profitability over the previous quarter loss of $503,000.

"With a positive EBITDA reported for the third quarter, we have turned the corner and demonstrated significant financial improvement from the beginning of the year by focusing on revenue growth and cost cutting," commented Alan Kwong, CEO and Chairman of PharmEng. "We will be concentrating on building the Keata business and ensuring a 2007 completion of our new pharmaceutical manufacturing facility in Nova Scotia," concluded Mr. Kwong.

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



Selected Financial Highlights:

Consulting Manufacturing Total
(in thousands) $ $ $
Three Months Ended Sep 30, 2006:
Assets 3,018 7,402 10,420
Revenue 2,043 549 2,592
EBITDA 747 (744) 3
Amortization 30 160 190
Interest expense 62 74 136
Earnings (loss) before taxes 655 (978) (323)
Income tax expense (benefit) 166 (301) (135)


Business Highlights in the First Quarter:

- Consolidated EBITDA for operations continues to trend positively, improving from a loss in Q1 of $784,000 to a positive EBITDA of $3,000 in Q3.

- The Company continues to expand consulting services in the US, with new offices opening in San Francisco during the quarter.

- Contract manufacturing revenues continue to improve quarter over quarter.

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
    Website: www.pharmeng.com