Forterra Environmental Reports 2008 Year-End Results



    
    -   Accomplishments include improved breeding methods and increase in
        worm population to current level of approximately 20.4 million,
        addition of automated blending equipment and commencement of
        vermicompost production, successful move of manufacturing and head
        office to new location resulting in significant cost savings and
        improved operations
    -   After extensive evaluation, Forterra has reconfigured its plant for
        more efficient production and is ramping up manufacturing
    -   Company has sold product in 2009 to a number of major national and
        regional service companies and manufacturers of finished product who
        are carrying out trials
    

    PUSLINCH, ON, April 30 /CNW/ - Forterra Environmental Corp. (TSX-V:
FTE-V), an emerging leader in the production and sale of premium organic
soil-enrichment products based on worm castings, today announced its financial
results for the year ended December 31, 2008. Financial results conform to
Canadian generally accepted accounting principles (GAAP) and all currency
amounts are in Canadian dollars.
    "Looking back at 2008, it was a year of considerable progress for
Forterra, although this was not reflected in our financial performance," said
Donald Green, chairman and chief executive officer. "We have positioned
Forterra for further progress in 2009 as we ramp up our production and add new
significant customers."

    
    Mr. Green cited the following notable accomplishments in 2008.

    -   Forterra improved its worm breeding program as it refined its
        methods. After it purchased a total of 11,000 pounds of red wiggler
        worms in 2007 and 2008, it increased the total to more than 18,000
        pounds at year-end 2008 (approximately 1,500 production beds,
        referred to as trays) and an estimated more than 20,400 pounds as at
        April 28, 2009 (more than 1,700 trays). The current retail price for
        worms is about $30 per pound. As there are an estimated 1,000 worms
        per pound, this indicates a total population of about 20.4 million
        worms as at April 28, 2009.

    -   The company commenced the production of vermicompost during 2008. It
        invested in automated blending equipment to ensure worm bedding
        materials and food stocks are metered and measured to ensure
        consistent quality. This in turn helps to ensure that Forterra's end
        product is of consistent quality with respect to maintaining the same
        nutrient values for each batch produced.

    -   In the 2008 third quarter, Forterra decided to vacate its only plant,
        located at Downsview Park, Toronto, and to move to a new facility in
        Puslinch, Ontario. The leasing cost for the Puslinch plant is 21
        percent lower than the Downsview location, while offering 25 percent
        more square feet of production and warehouse space, and, more
        importantly, better air and water quality required to ensure the
        health of the company's growing worm population.

    -   The new facility also enabled the company to leave its former head
        office location in Concord, Ontario, for an additional annual savings
        in rent of $56,000, consolidating these operations with the
        manufacturing plant in Puslinch and bringing Forterra's management
        closer to the daily operations. The company is currently in
        negotiations to exit the existing leases at the former Downsview and
        Concord locations. In all, Forterra expects that the move to the
        Puslinch facility will result in annualized cost savings of nearly
        $100,000.

    -   Forterra continues to test its products with various organizations
        for numerous turf, plant, floriculture, and viticulture conditions,
        including regeneration, disease control, and fertilization. The
        company's goal is to produce the most-effective, consistent, high-
        quality organic soil supplements similar or superior to chemical-
        based products.

    -   Forterra strengthened its management team with the recruitment in
        June of Rick Denyes as its president and chief operating officer and
        the addition of a new plant manager in May 2008. In August,
        agronomist Tom Ferencevic agreed to serve as a consultant to the
        company. Mr. Ferencevic recently agreed to become a full-time
        employee. Subsequent to the 2008 year-end, the company also
        announced the appointment of Ron Reed as chief financial officer.

    -   Forterra succeeded in raising net proceeds of $2,241,129 during
        2008 through the issuance of common shares in private placements.
        The company used the proceeds to pay debts and for general working
        capital.
    

    Financial Highlights

    Forterra continues to be considered a development-stage company for
accounting purposes and, as such, the progress that the company is making is
not fully reflected in the financial statements. As a development-stage
company, its sales are applied to reduce sales and marketing expenses.
    Sales for 2008 increased to $110,508, compared with $38,439 in 2007, as
Forterra diversified its customer base.
    After expenses, including general, and administrative (G&A) ($1,557,730),
sales and marketing (net of sales amounting to $111,321), and research and
development (R&D) ($5,954), Forterra recorded a lower operating loss in 2008
of $1,675,005 compared with the prior year. In 2007, the operating loss was
$1,832,942 (including G&A of $1,564,805 sales and marketing expenses net of
sales of $173,154, and R&D of $94,983).
    The slight decline in G&A expense reflects, in part, vacancies in key
management positions for parts of the year, as well as the capitalization of a
portion of production labor as a component of inventory cost. Occupancy
expenses also declined about seven percent. Marketing expenses were higher in
2007 reflecting certain one-time expenses, including website development and
market research.
    Other notable expenses in 2008 included stock-based compensation of
$456,551 ($382,556 in 2007), amortization of property and equipment of $38,400
($23,400 in 2007), and interest and accretion on long-term debt of $120,890
($16,079 in 2007). In 2007, Forterra incurred a write-down of property and
equipment of $1,631,786 and a write-down of intangible assets of $1,035,978.
    The net loss for 2008 amounted to $2,241,477 (a loss of $0.03 per basic
and diluted shares outstanding, which amounted to a weighted average number of
70,026,117), compared with a net loss in 2007 of $4,776,143 (a loss of $0.09
per basic and diluted shares outstanding, which amounted to a weighted average
number of 53,817,614).
    At the 2008 year-end, Forterra had working capital of $298,421, compared
with a deficiency at the end of 2007 of $56,432. Subsequent to the year-end,
on March 31, 2009, Forterra raised $600,000 through the issuance of debentures
together with 2,400,000 of bonus shares through a non-brokered private
placement. While this strengthened the company's financial resources, Forterra
will require additional capital to fund its operations and growth strategy.

    Outlook

    "We have completed an extensive evaluation of our manufacturing process
required for the efficient production of commercial volumes of worm castings
and related products," said Rick Denyes, president and chief operating
officer. "Based on this evaluation, we have reconfigured our production
facilities and are ramping up manufacturing in the Puslinch plant.
    "We also have sourced a more complimentary food stock and automated
production equipment which will decrease the production cycle and associated
costs. Equipment purchases and worm reproduction and related activities will
influence production volumes. We expect that the Puslinch plant, which we only
moved into late last year, will be operating at or near full production
capacity by mid-2009," he continued.
    "A colder than anticipated spring 2009 has affected certain of the
company's customers, causing delays in their blending operations and the
potential loss or at least deferral of some sales. This has in turn adversely
affected Forterra's sales expectations for the 2009 first quarter. We expect
that at least some of these sales will be realized in the second quarter of
2009," he said.
    "Forterra has sold product to a number of major national and regional
service companies and manufacturers of finished product who are carrying out
trials during 2009. For competitive reasons, these customers are not
permitting us to disclose their names. We believe that at least some of these
companies will become longer-term customers for our products. Supplying these
and other potential customers will require Forterra to establish additional
manufacturing capacity by 2010," Mr. Denyes said.

    About Forterra Environmental Corp.

    Forterra manufactures and markets environmentally friendly soil
enhancers, using worm castings, which boost fertility while restoring the soil
with organic matter for sustainable, longer-term benefits, including stronger
root growth, and drought and pest resistance. Forterra products contain only
organic material. They are ideal for golf courses, sports fields, lawn care,
parks, nurseries, orchards, and vineyards. Essentially, Forterra uses red
wriggler worms to convert organic material into vermicompost or worm castings.
Worm castings contain micronutrients, which are required for healthy plant
development. Worm castings also contain microbes, which increase the rate at
which plants take up available macronutrients and micronutrients. Further
information is available on the company's website at www.forterra.com.

    Forward-Looking Statements

    This news release contains forward-looking statements based on current
expectations. These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially from those
reflected in these forward-looking statements. Such statements are based on
current expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such statements.
These uncertainties and risks include, but are not limited to, availability of
resources, competitive pressures, changes in market activity, the ability to
sign contracts with customers, the development of markets for worm castings,
its ability to breed and maintain a sufficiently large worm population, and
regulatory requirements. Risks and uncertainties about Forterra's business are
more fully discussed in the company's disclosure materials, including its
annual information form and MD&A, filed with the securities regulatory
authorities in Canada. Forterra assumes no obligation to update any
forward-looking statement or to update the reasons why actual results could
differ from such statements.

    
    Neither the TSX Venture Exchange Inc. nor its Regulation Services
    Provider (as that term is defined in the policies of the TSX Venture
    Exchange) accepts responsibility for the adequacy or accuracy of this
    release.


                         FORTERRA ENVIRONMENTAL CORP.
               (Previously named "REWORKS Environmental Corp.")
                        (A Development Stage Company)

                      CONSOLIDATED FINANCIAL STATEMENTS

    Consolidated Balance Sheets

                                                    Year ended    Year ended
                                                   December 31,  December 31,
                                                       2008          2007
                                                         $             $
    -------------------------------------------------------------------------

                                   ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                        368,426       341,192
      Amounts receivable                               104,147        66,648
      Inventory                                        312,982        12,263
      Prepaid expenses and deposits                     76,515        53,167
                                                  ---------------------------
    TOTAL CURRENT ASSETS                               862,070       473,270
    PROPERTY AND EQUIPMENT                             432,686       205,589
    INTANGIBLE ASSETS                                        1             1
    GOODWILL                                            30,000             -
                                                  ---------------------------

    TOTAL ASSETS                                     1,324,757       678,860
                                                  ---------------------------
                                                  ---------------------------


                                 LIABILITIES

    CURRENT LIABILITIES
      Amounts payable and accrued liabilities          559,744       476,622
      Current portion of loans payable                       -        50,000
      Current portion of capital lease payable           3,905         3,080
                                                  ---------------------------
    TOTAL CURRENT LIABILITIES                          563,649       529,702
    LOANS PAYABLE                                            -        83,333
    CAPITAL LEASE PAYABLE                                    -         4,155
    LEASEHOLD INDUCEMENT                                90,534        24,362
                                                  ---------------------------
    TOTAL LIABILITIES                                  654,183       641,552
                                                  ---------------------------


                             SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                    8,668,601     6,675,842
    WARRANTS                                         1,367,716       965,850
    CONTRIBUTED SURPLUS                                960,745       494,662
    SHARES TO BE ISSUED                                 14,035             -
    (DEFICIT)                                      (10,340,523)   (8,099,046)
                                                  ---------------------------
    TOTAL SHAREHOLDERS' EQUITY                         670,574        37,308
                                                  ---------------------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       1,324,757       678,860
                                                  ---------------------------
                                                  ---------------------------



    Consolidated Statements of Operations and Deficit

                                                    Year ended    Year ended
                                                   December 31,  December 31,
                                                       2008          2007
                                                         $             $
    -------------------------------------------------------------------------
    EXPENSES
      General and administrative                     1,557,730     1,564,805
      Sales and marketing                              111,321       173,154
      Research and development (net)                     5,954        94,983
                                                  ---------------------------
      Loss before other expenses                     1,675,005     1,832,942

    OTHER EXPENSES
      Stock-based compensation                         456,551       382,556
      Amortization of property and equipment            38,400        23,400
      Amortization of intangible assets                      -        63,755
      Write down of property and equipment                   -     1,631,786
      Write down of intangible assets                        -     1,035,978
      (Gain) on forgiveness of debt                    (35,877)     (218,412)
      Foreign exchange (gain)                           (2,592)      (33,525)
      Loss on asset disposal                                 -         4,980
      Interest and accretion on long-term debt         120,890        16,079
      Interest on held for trading investments         (14,351)      (12,755)
      Interest expense                                   3,451        49,359
                                                  ---------------------------

    NET LOSS FOR THE YEAR                            2,241,477     4,776,143

    DEFICIT, beginning of year                       8,099,046     3,301,177
    Working capital deficiency assumed
     on reverse takeover                                     -        21,726
                                                  ---------------------------

    DEFICIT, end of year                            10,340,523     8,099,046
                                                  ---------------------------
                                                  ---------------------------


    Weighted average shares outstanding             70,026,117    53,817,614
    Loss per share basic and diluted                      0.03          0.09



    Consolidated Statements of Cash Flows
                                                    Year ended    Year ended
                                                   December 31,  December 31,
                                                       2008          2007
                                                         $             $
    -------------------------------------------------------------------------
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net (loss) for the year                         (2,241,477)   (4,776,143)
      Changes to income not involving cash:
      Amortization                                      38,400        87,155
      Write down of property and equipment                   -     1,631,786
      Write down of intangible assets                        -     1,035,978
      Accretion on long-term debt                       86,835             -
      Stock-based compensation                         456,551       382,556
      Leasehold inducement                              66,172       (23,023)
      Issuance of shares for settlement of interest      1,425             -
      (Gain) on forgiveness of debt                    (35,877)     (218,412)
      Loss on asset disposal                                 -         4,980
      (Gain) on foreign exchange                             -       (36,575)
                                                  ---------------------------
                                                    (1,627,971)   (1,911,698)

    Changes in non-cash working capital balances
      (Increase) in prepaid expenses and deposits      (23,348)      (14,871)
      (Increase) in amounts receivable                 (37,499)      (16,948)
      (Increase) in inventory                         (300,719)      (12,263)
      Increase (decrease) in amounts payable
       and accrued liabilities                          53,929      (222,829)
                                                  ---------------------------
    Cash flows from operating activities            (1,935,608)   (2,178,609)
                                                  ---------------------------

    CASH FLOWS FROM FINANCING ACTIVITIES
      Repayment of loans payable                      (136,663)     (190,986)
      Shareholders' loan received                      310,000             -
      Shareholders' loan paid                         (260,000)     (158,992)
      Issuance of common shares (net)                2,249,932     2,999,823
                                                  ---------------------------
    Cash flow from financing activities              2,163,269     2,649,845
                                                  ---------------------------

    CASH FLOWS FROM INVESTING ACTIVITIES
      Additions to property and equipment             (200,427)     (209,923)
                                                  ---------------------------

    Increase in cash and cash equivalents               27,234       261,313
    Cash and cash equivalents, beginning of year       341,192        79,879
                                                  ---------------------------

    Cash and cash equivalents, end of year             368,426       341,192
                                                  ---------------------------
                                                  ---------------------------

    CASH AND CASH EQUIVALENTS CONSIST OF:
      Cash                                              68,426        91,192
      Cash equivalents                                 300,000       250,000
                                                  ---------------------------
                                                       368,426       341,192
                                                  ---------------------------
                                                  ---------------------------

    SUPPLEMENTAL INFORMATION
    Interest paid                                       34,055        65,437
    Income taxes paid                                        -             -
    Broker warrants issued for share issue costs        60,228       202,956
    Issuance of shares for settlement
     of shareholder loan                                50,000             -
    Issuance of shares for business acquisition         30,000             -
    

    %SEDAR: 00013128E




For further information:

For further information: Investor and Media Relations, Richard W.
Wertheim, Wertheim + Company Inc., Email: wertheim@wertheim.ca, (416)
594-1600, (416) 518-8479 (cell)

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FORTERRA ENVIRONMENTAL CORP.

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