KREE TECH also announces change to board of directors, appointment of an
interim COO, and consolidation of manufacturing facilities
ST-HUBERT, QC, March 28 /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, 2008. All dollar amounts are in Canadian
dollars unless otherwise specified.
"We are disappointed at the results of this quarter" said Gregory Moffat,
CEO of Kree. "The significant improvements made in production were not
recognized as a result of our failure to generate consistent sales in the
third quarter. We will adopt some aggressive plans to turn this situation
around. We are completely committed to our shareholders, business partners,
creditors and we will focus on rectifying the situation through whatever means
Net sales for the three months ended January 31, 2008 were $833,000, a
decrease of $165,000 compared to $998,000 of sales in the third quarter of the
previous year. The decrease was due mainly to the declining value of the U.S.
dollar versus the Canadian dollar. The Company recorded 93% of its sales in
U.S. currency, and the impact of exchange rate fluctuations was $127,000, or
15.2% of sales. Excluding this impact, third quarter sales would have
decreased by 3.8% year-over-year. This decline was due primarily to cheaper
imports from offshore competition.
Gross margin improved to $183,000 in the third quarter, representing
22.0% of revenues, compared to $144,000 or 14.4% of revenues in the third
quarter of last year. This increase can be primarily attributed to a reduction
of fixed expenses following the closure of Kree's Plattsburgh, New York plant
in Q4 2007, and the consolidation of all U.S. manufacturing operations at the
Clearwater, Florida plant.
Selling expenses were $34,000 in the third quarter, down from $118,000
during the same quarter last year. Savings were mainly attributable to the
reduction in U.S. sales personnel and the decline in the American dollar.
Administrative expenses were $208,000, down approximately $187,000 from the
third quarter last year. The decline was driven by a non-recurring provision
incurred in 2007 due to the financial difficulties faced by one of Kree's
customers. Additional savings were realized through the closure of the
Plattburgh, New York plant, the consolidation of manufacturing operations in
the Clearwater, Florida plant, and the reduction of retainer fees with
Kree's net loss in the third quarter of 2008 was $86,000 or $0.0039 per
share, an improvement of $321,000 compared to an after tax loss of $407,000 or
$0.0186 during the same quarter last year.
Full financial information is available on SEDAR at www.sedar.com.
Kree announced today that Guy Girard has resigned his position from the
Board of Directors.
"We appreciate Guy's contribution to the Board and thank him for his 3
years' guidance and support to Kree. We wish him all the best in his future
endeavours and commitments," said Greg Moffat.
Kree is currently engaged in the search for a replacement for Mr. Girard
and expects to make an announcement in the near future.
Appointment of an interim COO
Kree announced that it has engaged Michael R. Koeppel, a director of the
Corporation, as its interim COO to assist in running the day to day
operations, allowing the CEO to focus on strategic options.
Mr. Koeppel, who is familiar with the Corporation, has 26 years'
experience, a majority of which was at a senior executive level, Mr. Koeppel
was an officer and member of Management Committee at an international
manufacturer and distributor of medical and paper products company. In
addition, Mr. Koeppel was a member of Management Committee for a "spin out" of
a Fortune 500 Company that went public. Both of these companies were financed
by a private equity firm. Mr. Koeppel has a proven record of leading companies
through start-up, survival, turnaround and growth modes.
Among his significant previous positions, Mr. Koeppel was with
PriceWaterhouseCoopers. In 2002 Mr. Koeppel founded ECapital-Financing, a
consulting group that focuses on small to mid-sized manufacturing, high
technology and professional service companies in a distressed situation or
requiring capital injection.
Mr. Koeppel has a Master of Accountancy Degree from Bowling Green State
University and has been a Certified Public Accountant for more than twenty
years. He earned his Bachelor of Science degree from State University College
of New York at Buffalo in Economics where he graduated Summa Cum Laude.
Earlier this year, Mr. Koeppel was accredited by the American Institute of
Certified Public Accountants as a Certified Information Technology
Consolidation of manufacturing facilities
Finally, Kree announced that it is planning to close its Clearwater,
Florida facility and to consolidate all manufacturing operations in its
St-Hubert, Quebec plant. The streamlining of operations is anticipated to
reduce operating costs and to enhance the Corporation's competitive position.
The execution of the consolidation is expected to be completed by the end of
In commenting on the consolidation, Mr. Gregory Moffat, Chief Executive
Officer of Kree, stated that "We are confident that this rationalization will
substantially reduce our cost profile as a result of improving capacity
utilization in St-Hubert without jeopardizing the potential of the
All employees at the Clearwater location have been notified of the
planned closure and have agreed to cooperate with the Corporation to make the
transition as smooth as possible. At this extremely difficult time, the
Corporation wishes to extend its sincere thanks to these employees for their
past and continued support.
Although Kree is still experiencing difficulties in a soft business
environment for its core product lines, the Corporation believes its efforts
on promoting its new AWC (Advanced Wound Care) products will bear fruit.
Management is encouraged with the response of the industry to the
Corporation's Staph Safe product line. The Staph Safe products provide a
unique, cost effective AWC solution for the First Aid Market.
The Corporation will aggressively address the financial challenges it
faces in a timely and responsible manner. Management is of the opinion that
the Corporation will require additional liquidity in the upcoming months,
which could include additional debt financing or an equity offering. There can
be no assurance that KREE will be successful in its efforts to arrange
additional financing on satisfactory terms.
"Closing of our Florida plant while painful, is one of the plans we have
in mind to turn the situation around at Kree." said Mr. Moffat. "We will
"leave no stone unturned" to optimize our value, including but not limited to
the potential sale of the Corporation."
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 complies with a number of quality management systems in the
United States and in Canada, including ISO 9001-2000.
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, except in accordance with applicable securities
laws. 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
For further information:
For further information: Greg Moffat, Chief Executive Officer, Kree Tech
International Corporation, (727) 540-9295, email@example.com