Biorem Inc. - First half 08 results ahead of 07; backlog at $15 mm historic high



    GUELPH, ON, Aug. 12 /CNW/ - Biorem Inc. (TSXV: BRM) announced today its
results for the second quarter ended June 30, 2008, which are summarized in
the following table:

    
    -------------------------------------------------------------------------
                                            Second quarter      Year-to-date
                                             ended June 30     ended June 30
    -------------------------------------------------------------------------
    Information in table is in thousands
     except per share data                   2008     2007     2008     2007
    -------------------------------------------------------------------------
    REVENUE                                $2,472   $2,215   $5,657   $3,984
    -------------------------------------------------------------------------
    GROSS PROFIT                              807      727    2,262    1,345
    -------------------------------------------------------------------------
    EBITDA                                   (741)    (795)    (505)  (1,131)
    -------------------------------------------------------------------------
    NET LOSS                                 (870)    (736)    (766)  (1,112)
    -------------------------------------------------------------------------
    BASIC EARNINGS PER SHARE                (0.07)   (0.06)   (0.06)   (0.09)
    -------------------------------------------------------------------------
    DILUTED EARNINGS PER SHARE              (0.07)   (0.06)   (0.06)   (0.09)
    -------------------------------------------------------------------------
    WEIGHTED AVERAGE COMMON SHARES         11,978   11,978   11,978   11,978
    -------------------------------------------------------------------------
    

    Consolidated revenue in the quarter was $2,472,000, which is up $258,000
or 11.6% over the comparative period in the prior year. Consolidated revenue
for the year-to-date was $5,657,000 which is up $1,672,000 or 42% over the
prior year.
    Order Bookings for the first half of 2008 totaled $10,267,000 consisting
of $1.4 million from Industrial; $1.4 million from International and
$7.5 million from Municipal. The Order Backlog is $14.7 million at the end of
the quarter. The Order Backlog is up $5.7 million or 63% compared to the same
period ending June 30, 2007.
    Gross profit in the quarter was $807,000, which is up $80,000 or 11% over
the comparative period in the prior year. The gross margin percentage for the
quarter was the same as in the prior year.
    Gross profit year-to-date was $2,262,000 which is up $917,000 or 68% over
the prior year. The gross profit increase is a result of increased revenue as
well as improved margins on projects. The gross margin percentage for the
year-to-date increased to 40% from 34% in the prior year.
    Operating expenses in the quarter were $1,548,000, which were $26,000 or
1.7% higher than for the comparative period in the prior year. The variance by
expense component is outlined as follows:

    
    -   Sales and marketing expenses of $625,000 were down $46,000 or 6.9%.

    -   Research and development expenses net of government assistance and
        investment tax credits of $269,000 were up $135,000 or 100%. These
        expenses are partially offset by government assistance and investment
        tax credits. The Company received notice that it was approved by IRAP
        for a substantial research project targeting industrial air pollution
        product development in the amount of $404,000.

    -   General and administrative expenses are up $80,000 or 15%. This
        increase was a result of one-time only reorganization costs.

    -   Fluctuations in foreign exchange rates in the second quarter resulted
        in an exchange loss of $31,000 in 2008 as compared to an exchange
        loss in the comparative period of 2007 of $174,000.
    

    Total working capital at June 30, 2008 was $3,483,000, which is a
reduction of $380,000 since the start of the year. Cash used in operating
activities during the quarter was $1,074,000 and for the year-to-date was
$1,930,000. Offsetting the reduction in cash is the increase in
Unbilled Revenue at the end of Q2 08 to $1,904,000 from $128,000 at
December 31, 2007. This represents revenue that has been recognized but not
yet invoiced. This timing difference is due to future scheduled sales
invoicing according to contract terms. Unbilled Revenue is a contractual
obligation of our customers and will be turned into cash over the short term.
This high level of Unbilled Revenue is a result of increased project activity
and larger sized contracts.
    Commenting on the quarterly results, Peter Bruijns, President and CEO
said, "The Company is performing better in 2008 than 2007 and we are confident
that this trend will continue. This confidence is embedded in the historically
high level of our Backlog. We anticipate that approximately 80% of this
$15 million Backlog will translate into revenue over the next four quarters.
We are also seeing increases in our sales pipeline, which bodes well for
Bookings into 2009."

    About BIOREM Inc.

    BIOREM manufactures Biosorbens(R) biofilter media and is a leading
supplier of biofilters for air pollution control in municipal and industrial
applications, including BIOCUBE(R) modular units and Mytilus(R) biotrickling
filters. With over 500 installed systems and over a decade of experience, the
Company's products are the technology of choice for odor control at waste
water treatment plants across North America. Additional information on BIOREM
is also available at our web site at www.biorem.biz.

    
    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release. The
    TSX Venture Exchange Inc. has in no way passed upon the merits of the
    proposed transaction and has neither approved nor disapproved of the
    contents of this release.
    

    Forward-Looking Statements

    This press release contains forward-looking statements based on current
expectations. These forward-looking statements contain various risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Risks and uncertainties about the
Company's business are more fully discussed in the disclosure materials,
financial statements and MD&A filed with the securities regulatory authorities
in Canada on www.sedar.com

    Non-GAAP Measures

    "EBITDA", "Order Bookings", and "Order Backlog" do not have any
standardized meaning prescribed by Canadian generally accepted accounting
principles ("GAAP") and may not be comparable to measures presented by other
companies.
    EBITDA is used to denote earnings (loss) from operations and represents
earnings before interest, income taxes, depreciation and amortization. EBITDA
should not be construed as a substitute for net income determined in
accordance with GAAP. This measure is important to the Company since it is
used by potential investors and lenders to evaluate the ongoing cash
generating capability of the Company and thus the amounts they are willing to
invest and lend to the Company.
    Order Bookings and Order Backlog are non-GAAP measures that the Company
uses to evaluate its sales performance. Order Bookings are those binding
contracts that the Company enters into with a third party for the delivery of
our products or services. As Order Bookings are received, the contract value
(before any associated sales taxes) is included in the Order Backlog. The
Order Backlog is reduced by the revenue that is recognized on each project.

    %SEDAR: 00020304E




For further information:

For further information: Ed Corbett, Chief Financial Officer, BIOREM
Technologies Inc., ecorbett@biorem.biz, Tel: (519) 767-9100 x275

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BIOREM Inc.

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