Kree Tech reports third quarter 2007 financial results



    Also announces granting of options under stock option plan

    TSX-V: KT

    ST. HUBERT, QC, March 16 /CNW/ - Kree Tech International Corporation
("Kree" or "the Corporation") (TSX-V: KT), an established and recognized
developer and manufacturer of superior pressure-sensitive products for the
healthcare industry, today announced its financial and operating results for
the third quarter ended January 31, 2007. All amounts are in Canadian dollars
unless otherwise specified.
    "We recently made significant progress in rationalizing and refocusing
our operations around the new Florida facility," said CEO Gregory Moffat.
"This will improve our efficiency while at the same time enabling us to begin
production on up to six new product lines during calendar 2007. We launched
the first of these, our OptX catheter dressing line, this week at the
Association of Operating Room Nurses convention in Orlando, and reactions were
very encouraging. Advanced Wound Care products like these are key to our
future growth."

    Financial Review

    Total sales for the third quarter ended January 31, 2007 were $998,000
compared to $1,392,000 in the third quarter of the previous year. The
year-over-year revenue decrease of approximately 28.3% is attributable in part
to competition in the low end of the market from cheaper, low quality,
commodity products imported from China, and slower than expected sales orders
from our customers this quarter.
    Gross margin was 14.4% in the third quarter of 2007, compared to 28.0% in
the same period last year. The primary cause of the decrease was fixed costs
related to operating the Florida plant, which was not operational in the first
seven months of fiscal 2006, and is not yet generating the expected production
volume or sales. Additionally, although the Corporation was able to maintain
selling prices, increased competition restricted Kree's ability to pass along
increased costs, including higher transportation and raw material expenditure,
to its customers.
    Selling expenses were $118,000 in the third quarter this year, down from
$121,000 in the third quarter of 2006. The savings were due to a decrease in
sales commissions and a decline in the U.S. dollar. Administrative expenses
increased by approximately $75,000 to $395,000 in the quarter due to a
non-recurring provision for doubtful accounts of $170,000 taken due to the
financial difficulties that one of Kree's customers is currently facing.
    Kree's net loss in Q3 2007 was $407,000 or $0.0186 per share, compared to
an after tax loss of $49,000 or $0.0022 per share in the same quarter last
year.

    Consolidation of Manufacturing Facilities

    In February 2007, Kree closed its Plattsburgh, New York plant in order to
consolidate all U.S. manufacturing capabilities at the Clearwater, Florida
facility. It is anticipated that the consolidation will help to streamline
U.S. operations resulting in improved profitability and an enhanced
competitive position for the Corporation.

    Outlook

    Through the vertical integration of its operations, Kree is pursuing its
strategy of improved production efficiency. Throughout the coming year the
Corporation expects to increase production while pursuing new markets for its
products. In addition, the consolidation of operations in the Florida
facility, realizes Kree's initial objectives in the creation of the new
manufacturing location to achieve substantial savings and to enhance the
Corporation's competitive position.

    Stock Option Plan

    Kree also announced that in accordance with its February 22, 2005
Prospectus, which contemplated the issuance of 850,000 options at $0.35, it
has granted 297,500 options. No further options will be issued under that
Prospectus. Furthermore, in accordance with its Employee Stock Option Plan
(ESOP), the Corporation will grant 230,000 additional options exercisable at
an exercise price $0.10 to directors and employees as described in the
following chart. The options vest at varying periods and will expire after
60 months.

    
        OPTIONEE                NUMBER OF OPTIONED    EXERCISE
                                       SHARES           PRICE
        Robin B. Hutchison            170,000           $0.35
        Robin B. Hutchison             25,000           $0.10
        Charles Gelber                 42,500           $0.35
        Charles Gelber                 25,000           $0.10
        Guy Girard                     42,500           $0.35
        Simon Lepage                   42,500           $0.35
        Simon Lepage                  100,000           $0.10
        Other employees                80,000           $0.10
    


    About Kree

    Headquartered in St. Hubert, Quebec, Kree Tech International Corporation
is an established and recognized developer of superior pressure-sensitive
products for the health care industry. For over a decade, Kree has developed
innovative and cost-efficient medical tape products including printed vinyl,
coated plastic and fabric substrates, and bulk finished goods. Kree has also
developed proprietary coating formulations giving its medical bandages greater
effectiveness and versatility. These and other innovations have resulted in
Kree becoming a key supplier to a number of branded and private label
companies. Kree is registered under a number of quality management programs
including ISO 9001-2000 as well as FDA certification required for medical
device manufacturing.

    This release contains various forward-looking statements as of the date
hereof and we undertake no obligation to update these statements regardless of
new developments or otherwise. Statements in this release that are not
historical are forward-looking statements. Such statements are subject to
various risks and uncertainties that could cause actual results to vary
materially from those stated. Such risks and uncertainties include but are not
limited to: economic conditions in various regions, product and price
competition, supplier and raw material prices, foreign currency exchange rate
changes, interest rate changes, increased legal expenses and litigation costs
and other risks and uncertainties described more fully in the Corporation's
annual filings on Sedar.





For further information:

For further information: Greg Moffat, Chief Executive Officer, Kree Tech
International Corporation, (727) 540-9295, gmoffat@kreetech.com

Organization Profile

KREE TECHNOLOGIES INTERNATIONAL CORPORATION

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