Biorem Revenues Up 80 Percent in First Quarter

 

Biorem Inc. announced results for the first quarter ended March 31, 2008, which are summarized in Figure 8.

FIGURE 8.  BIOREM RESULTS

	First quarter ended March 31
Information in table is in thousands except per share data	2008	2007
REVENUE	$3,184	$1,769
GROSS PROFIT	1,455	618
EBITDA	236	(336)
NET EARNINGS	104	(375)
BASIC EARNINGS PER SHARE	0.01	(0.03)
DILUTED EARNINGS PER SHARE	0.01	(0.03)
WEIGHTED AVERAGE COMMON SHARES	11,978	11,978

 

 

First quarter revenue was $3,184,000, which is up $1,415,000 or 80 percent over the comparative period in the prior year. This also represents an 8.4 percent increase over revenue in the 4^th quarter 2007 and a very encouraging trend of four continuous quarters with revenue increases. Strong revenue growth has resulted from the successful implementation of the major sales initiatives adopted in early 2007 to bring special attention separately to the municipal and industrial marketplaces and to build a very strong manufacturing representative network.

 

New orders in the quarter were $2,150,000 resulting in a current order backlog of $9 million. The backlog is up $1.3 million or 17 percent from March 31, 2007.

 

Gross profit in the quarter of $1,455,000 is up $837,000 from last year's comparative quarter resulting from increased revenue as well as improved margins on projects. This improvement has driven the gross margin up to 45.7 percent compared to the 1^st quarter 2007 of 34.9 percent.

 

Operating expenses were $1,219,000 which is up $265,000 or a 27.8 percent increase compared to the comparative quarter of $954,000. The largest increases are as follows:

 

·         Sales and marketing expenses of $620,000 are up $231,000 or 59.4 percent to account for higher commissions as well as increased personnel costs.

·         Research and development expenses are up $94,000 or 61.8 percent from 2007 primarily due to activity associated with an ongoing research program targeting industrial air pollution product development.

·         There was an exchange gain of $102,000 in the 1^st quarter 2008 as compared to an exchange loss in the comparative period of 2007 of $14,000.

 

Although operating expenses were higher than last year’s first quarter, the significant increase in gross margin brought the company to a positive net earnings of $104,000 compared to a loss of $375,000 in the 1^st quarter 2007.

 

The company’s liquidity improved significantly in the 1^st quarter 2008. Net working capital increased by $337,000 in the three-month period. Total working capital at March 31, 2008 was $4,201,000.

 

Commenting on the quarterly results, Peter Bruijns, President and CEO said, “The very favorable results confirm the positive direction of the company’s sales restructuring from last year. Not only are the number of orders per quarter increasing, the average deal size is rising as the company is winning many large orders. It is also encouraging to see a healthy gross margin which is expected to continue throughout 2008.”

 

BIOREM^® went on to announce that, as part of an internal reorganization, the Director of Operations has departed from the company. Peter Bruijns will take responsibility for this function in the interim as the company builds best-practices and determines the most cost effective structure to deliver on the expanding business and new orders from both North America and internationally.

 

BIOREM recently received  two orders totaling $1 million for odor control systems in the states of Florida and Texas. The projects include a large biotrickling filter project in Cape Coral, FL valued at over $800,000 and a modular biofilter order for the City of Corpus Christi, TX.

 

The Cape Coral installation will utilize the Mytilus^® product line. These large-scale biotrickling filter systems were introduced within the last several years to strategically expand the market size for the company. The Corpus Christi system will use the well-established Basys biofilter and is the fifth system installation for this customer. This shows the continued satisfaction that the company’s customer base has in the BIOREM^® product line.

 

“The biotrickling filter for Cape Coral will treat 10,000 cubic feet per minute of foul air. We have been advancing our trickling technology dramatically, which has resulted in our capability to supply state-of-the-art systems to end-users.” said Peter Bruijns, President and CEO. “The Cape Coral installation is a fast track project to be completed within six months. BIOREM^® has a history of quality performance delivered on time and this was a key factor in the selection process.

 

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