Forterra Environmental Reports First-Quarter 2009 Results



    
    -   Company continues to make good progress operationally as producing
        worm population increased to approximately 20.7 million at end of May
    -   Trials continue with potential national and regional customers
    -   First-quarter results adversely affected by colder weather that
        caused customers to delay their blending operations
    -   Company exploring options to raise additional capital
    

    PUSLINCH, ON, May 29 /CNW/ - Forterra Environmental Corp. (TSX-V: FTE-V),
a manufacturer, marketer, and seller of premium organic soil-enrichment
products based on worm castings, today announced its financial results for the
first quarter ended March 31, 2009. Financial results conform to Canadian
generally accepted accounting principles (GAAP) and all currency amounts are
in Canadian dollars.
    "As we reported on April 30, with the release of our 2008 year-end
financial results," said Rick Denyes, president and chief operating officer,
"our 2009 first-quarter sales were adversely impacted by a colder than
expected first few months of the year that caused certain of our customers to
delay their blending operations. This resulted in a loss or at least deferral
of some sales to them by Forterra. We expect that some of these sales will be
realized in the second quarter.
    "Forterra has continued to make good progress in a number of areas that
should positively affect our financial performance in future quarters and
particularly in 2010," Mr. Denyes continued. "We have achieved improvement in
the operations of our new plant in Puslinch, including a steady increase in
the number of production worms that are generating castings for sales. With
the addition of approximately 300,000 production worms in May, we now are up
to an estimated 20.7 million worms in our manufacturing trays generating
castings. That is about a 15 percent increase from the estimated 18 million
production worms that we had at the end of 2008.
    "We also are pleased that we have been able to attract a number of
regional and national service companies and manufacturers of finished products
who taken product from us to conduct trials this year. For competitive
reasons, these companies are not permitting us to disclose their names. We
believe that at least some will become longer-term customers, but large-volume
sales are not likely to take place until 2010.
    "Earlier this month," he continued, "we were able to announce that one
such customer is Lambert Peat Moss, based in Rivere-Ouelle, Quebec, which is
one of three major peat moss and horticultural peat mix producers in North
America. Lambert took delivery on an initial order of about 12,000 pounds of
worm castings for blending with its peat moss products to determine the most
effective mixes for its customers. Lambert initially intends to use our worm
castings in rose shrub and tree mix products that it sells in the U.S. retail
market, as well as in other mixes for greenhouse growers. This will be the
first time that Forterra's product is included in mixes sold to retail
customers in the United States and may also open up other market opportunities
for Forterra."

    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 the 2009 first quarter were $22,119, compared with $4,196 in
the 2008 quarter. After expenses, including general, and administrative (G&A)
($442,770), sales and marketing (net of sales amounting to $16,996), and
research and development (R&D) ($10,467), Forterra recorded an operating loss
of $470,234 in the 2009 first quarter. In the 2008 first quarter, the
operating loss was $363,337, after G&A of $317,146, sales and marketing
expenses net of sales of $31,118, and R&D of $15,073).
    The higher G&A in the 2009 period was due in part to increased occupancy
expense as the company had to include the rental costs of its former plant and
head office that it vacated when it moved to the lower-cost and better-suited
site in Puslinch. Forterra continues to see to sublet its former locations and
to negotiate a settlement with the landlords of these premises.
    The most significant additional expense in the 2009 first quarter was
$144,000 for interest and accretion on long-term debt (none in the 2008
quarter), as well as slightly higher costs for stock-based compensation and
amortization of property and equipment. The net loss for the 2009 first
quarter was $708,192 (a loss of $0.01 per basic and diluted shares
outstanding, which amounted to a weighted average number of 79,555,761),
compared with a net loss in the 2008 period of $451,185 (a loss of $0.01 per
basic and diluted shares outstanding, which amounted to a weighted average
number of 61,509,094).
    At the end of the 2009 first quarter, Forterra had working capital of
$378,693, compared with $298,421 at the 2008 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.
    As the result of the loss or deferral of sales through the first part of
2009 and the company's larger than anticipated loss, Forterra's sales and
level of working capital are below budget. The company is taking steps to
reduce its cash requirements in the near term, including postponing certain
planned capital investments and reducing operating expenses. It also is
continuing to explore options to raise additional funds. As previously stated,
Forterra also expects to require additional capital to carryout its
longer-term growth strategies.
    "While we are experiencing pressure on our financial liquidity in the
short term, we continue to be excited about the longer-term opportunities for
Forterra's growth and our ability to create value for our shareholders," said
Don Green, the company's chairman and chief executive officer.

    About Forterra Environmental Corp.

    Forterra manufactures, markets, and sells 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 BALANCE SHEETS
    AS AT MARCH 31,

                                                      Mar. 31,      Dec. 31,
                                                       2009          2008
                                                         $             $
    -------------------------------------------------------------------------

                                   ASSETS
    CURRENT ASSETS
      Cash and cash equivalents                        509,879      368,426
      Amounts receivable                                40,964      104,147
      Inventory                                        376,425      312,982
      Prepaid expenses and deposits                     77,861       76,515
                                                  ---------------------------
    TOTAL CURRENT ASSETS                             1,005,129      862,070
    PROPERTY AND EQUIPMENT                             480,381      432,686
    INTANGIBLE ASSETS                                        1            1
    GOODWILL                                            30,000       30,000
                                                  ---------------------------

    TOTAL ASSETS                                     1,515,511    1,324,757
                                                  ---------------------------
                                                  ---------------------------


                                 LIABILITIES

    CURRENT LIABILITIES
      Amounts payable and accrued liabilities          623,356      559,744
      Current portion of capital lease payable           3,080        3,905
                                                  ---------------------------
    TOTAL CURRENT LIABILITIES                          626,436      563,649
    LOANS PAYABLE                                      600,000            -
    LEASEHOLD INDUCEMENT                                97,668       90,534
                                                  ---------------------------
    TOTAL LIABILITIES                                1,324,104      654,183
                                                  ---------------------------


                            SHAREHOLDERS' EQUITY

    CAPITAL STOCK                                    8,812,601    8,668,601
    WARRANTS                                         1,367,716    1,367,716
    CONTRIBUTED SURPLUS                              1,045,770      960,745
    SHARES TO BE ISSUED                                 14,035       14,035
    (DEFICIT)                                      (11,048,715) (10,340,523)
                                                  ---------------------------
    TOTAL SHAREHOLDERS' EQUITY                         191,407      670,574
                                                  ---------------------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       1,515,511    1,324,757
                                                  ---------------------------
                                                  ---------------------------



    FORTERRA ENVIRONMENTAL CORP.
    (Previously named "REWORKS Environmental Corp.")
    (A Development Stage Company)
    CONSOLIDATED STATEMENTS OF OPERATIONS AND
    DEFICIT
    MARCH 31, 2009,                                  3 Months      3 Months
                                                      ended         ended
                                                     March 31,     March 31,
                                                       2009          2008
                                                         $             $
    -------------------------------------------------------------------------
    EXPENSES
      General and administrative                       442,770       317,146
      Sales and marketing                               16,996        31,118
      Research and development (net)                    10,467        15,073
                                                  ---------------------------
      Loss before other expenses                       470,234       363,337

    OTHER EXPENSES
      Stock-based compensation                          85,025        79,046
      Amortization of property and equipment            15,564         5,035
      Interest and accretion on long-term debt         144,000             -
      Interest expense                                  (6,631)        3,407
                                                  ---------------------------

    NET LOSS FOR THE QUARTER                           708,192       451,185

    DEFICIT, beginning of year                      10,340,523     8,099,046

                                                  ---------------------------

    DEFICIT, end of quarter                         11,048,715     8,550,231
                                                  ---------------------------
                                                  ---------------------------


    FORTERRA ENVIRONMENTAL CORP.
    (Previously named "REWORKS Environmental Corp.")
    (A Development Stage Company)
    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     3 Months      3 Months
                                                      ended         ended
                                                     March 31,     March 31,
                                                       2009          2008
                                                         $             $
    -------------------------------------------------------------------------
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net (loss) for the quarter                        (708,192)     (451,185)
      Changes to income not involving cash:
      Amortization                                      15,564         5,036
      Accretion on long-term debt                      144,000             -
      Stock-based compensation                          85,025        79,407
      Leasehold inducement                               7,134         6,513
                                                  ---------------------------
                                                      (456,469)     (360,229)
    Changes in non-cash working capital balances
      (Increase) in prepaid expenses and deposits       (1,346)       12,681
      (Increase) in amounts receivable                  63,183        32,514
      (Increase) in inventory                          (63,443)      (18,561)
      Increase (decrease) in amounts payable and
       accrued liabilities                              62,787        10,619
                                                  ---------------------------
    Cash flows from operating activities              (395,288)     (322,976)
                                                  ---------------------------
    CASH FLOWS FROM FINANCING ACTIVITIES
      Repayment of loans payable                             -       (12,500)
      Loan received                                    600,000        20,000
                                                  ---------------------------
    Cash flow from financing activities                600,000         7,500
                                                  ---------------------------
    CASH FLOWS FROM INVESTING ACTIVITIES
      Additions to property and equipment              (63,259)      (48,292)
                                                  ---------------------------

    Increase in cash and cash equivalents              141,453      (363,768)
    Cash and cash equivalents, beginning of year       368,426       341,192
                                                  ---------------------------
    Cash and cash equivalents, end of March            509,879       (22,576)
                                                  ---------------------------
                                                  ---------------------------
    CASH AND CASH EQUIVALENTS CONSIST OF:
      Cash                                             509,879       (22,576)
      Cash equivalents
                                                  ---------------------------
                                                       509,879       (22,576)
                                                  ---------------------------
                                                  ---------------------------

    SUPPLEMENTAL INFORMATION
    Interest paid                                            -         3,407
    Income taxes paid                                        -             -
    

    %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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