Sentex Systems Ltd.
TSX VENTURE : SXS

Sentex Systems Ltd.

November 01, 2005 11:22 ET

Sentex Announces Third Quarter Results

WINCHESTER, ONTARIO--(CCNMatthews - Nov. 1, 2005) - Sentex Systems Ltd. (TSX VENTURE:SXS) ("Sentex") reports that the revenue for the three months ended on September 30, 2005 was $506,160 ($1,062,613 for the same quarter in 2004), resulting in a pre-tax net loss of -$228,774 or -$0.01 per share (-$40,012 or $0.00 per share for the same quarter in 2004).

Revenue declined 52.4% for the three months ended September 30, 2005 versus the comparative period for 2004. This is mainly due to a decline in sales to one of the Company's major distributors for Asia. There were no sales to this distributor for the three months ended September 30, 2005. Plans have been put in place to restore the sales to this region and to increase sales in other regions by the addition of new sales staff and sales consultants.

Higher raw materials costs, higher transportation cost and weak US currency for the three months ended September 30, 2005 had negative impact on the sales and gross margins. The decline in revenue in this quarter is also due to ceasing production and selling of certain low or no margin products. Management will continue to carry out profitability reviews for all products.

The majority of the Company's product prices are based in US dollar delivered prices, therefore the Company had to raise selling prices during this quarter. We believe customers have reduced their inventories and this reduced the Company's sales and revenue for the quarter ended September 30, 2005. Management will continue to monitor this situation and expects that as the customers' inventories are depleted, sales will resume to the normal course by the end of the next quarter.

Included in general expenses for the three months ended September 30, 2005 is a provision for allowance for doubtful accounts of $36,000 and an US exchange loss of $41,000 due to weak US dollar. These costs, coupled with low sales are the main reasons for the loss associated with the quarter ended September 30, 2005.

Cost of sales has decreased from 52.6% for three months ended September 30, 2004 to 51.2% in the current three months and, as a result the gross margin has been increased slightly.

The sales of the Company flax products increased by 99% versus the comparative period for 2004. We believe that the sales of our omega-3 flax product lines will continue to grow in both the human and the animal nutritional markets in near future.

We are very pleased to announce that Mr. David F. Gordon and Mr. Greg A. Starleaf will be working with the Company as sales and marketing consultants. Both of these individuals are currently consultants to the Animal health industry. Mr. Gordon spent 28 years in various roles with Eli Lilly & Co. both in Canada and the US. During his tenure with Eli Lilly & Co. Mr. Gordon was the Executive Director of sales and marketing for the Americas and Director of sales and marketing for the US swine, poultry and cattle business units. Mr. Gordon has had extensive involvement in the industry, including Chairman for the US Animal Health Institute and as a member of the National Pork Producers Council. Mr. Starleaf recently retired from Elanco Animal Health, a division of Eli Lilly & Co. after more than 28 years. Mr. Starleaf held many domestic and international positions within Elanco during his tenure there which included Global Director of Poultry marketing. Mr. Starleaf was also involved in industry affairs acting as a Director for the U.S National Chicken Council. Both Mr. Gordon and Mr. Starleaf have extensive experience in the global Animal nutritional market and thus will bring a great deal of marketing and sales expertise to our Company.

We are also very pleased to announce that Mr. Neill Hopkins and Ms. Fran Desloges had joined our Company as new sales executives. Mr. Neill Hopkins is the new VP of Sales for NutriBios Corp. and Ms. Fran Desloges is the new Product Sales Manager for Natunola Health.

Mr. Neill Hopkins has more than 25 years of sales experience in the grain and feed industry. Neill will work closely with Mr. Gordon and Mr. Starleaf and other senior management to expand the current sales activities in the animal nutritional market and to create new and more sales opportunities in other countries.

Ms. Fran Desloges has more than 20 years sales experience in the human nutritional market. During her career with Hershey Canada, Fran was one of the top sales people and achieved the gold sales standard three years in a row. Fran also spent about 10 years selling Gerber Baby Food products to grocers, drug stores, hospitals and wholesalers. Fran will be responsible for the sales of Natunola Health brand of omega-3 flax product lines into the human nutritional market.

About the Company:

Sentex Systems Ltd. and its manufacturing plant are located in Winchester, Ontario. It is the parent company of NutriBios Corp., which has a division called Natunola Health, which was acquired in 2002. Effective January 21, 2005 the two divisions combined operations at Winchester, Ontario and continued business as one entity.

NutriBios Corp. is a leading provider of natural and environmentally friendly products to replace antibiotics type growth promoters. The innovative, trial proven, bioactive natural product lines are made from GRAS grade natural additives. These products are marketed around the world.

Natunola Health is a manufacturer and researcher in the field of flax seed derived omega -3 fatty acids, specialty natural products, bio-nutrients and functional supplements for human and animal care markets. The Company also produces canola oil gels and other natural ingredients, for the cosmetic and personal care industry.

Some of the statements contained in the release are forward-looking statements, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information