Noveko International Inc. announces results for the fiscal year ended June 30, 2007



    Ticker Symbol: EKO / TSX Venture Exchange

    MONTREAL, Oct. 26 /CNW Telbec/ - Noveko International Inc. ("Noveko" or
"the Company") announces its results for the fiscal year ended June 30, 2007,
during which significant advances were achieved to strengthen its team and its
financial bases in anticipation of its future growth and to initiate the
marketing of its antimicrobial face masks and air filters. Thus, Noveko
arranged private placements totaling over $26 million during the fiscal year.
The Company started to reap the first benefits of its intensive marketing
initiatives subsequent to the end of fiscal 2007, by closing its first sales
of face masks and air filters for $2.7 million, while establishing major
strategic manufacturing and distribution alliances in North America and China.
The spin-offs from Noveko's new activities in the antimicrobial face mask and
air filter fields will be reflected in the coming periods' results.
    The various developments of the past 18 months transformed the profile of
the Company, which is now involved in the following sectors:

    
    - the development, manufacturing and marketing of medical equipment
      (portable real-time ultrasound scanners) entirely ensured, since the
      begining of the second half of 2007, by the subsidiary ECM (France),
      acquired on November 5, 2004, subsequent to the shift in focus by the
      subsidiary Noveko Inc., which was formely involved in these activities;
    - the custom processing and distribution of steel products performed by
      the subsidiary BLI, acquired on April 28, 2006; and
    - the development and marketing of products in the biomedical and
      environmental fields carried out since the beginning of 2007 by the
      subsidiary Noveko Inc. (antimicrobial face masks and air filters) and
      its subsidiary Laboratoire SyMa (Azuro sanitizers), acquired subsequent
      to the end of fiscal 2007, on July 26, 2007.

    "Our revenues rose 67.5%, to $12.8 million for fiscal 2007, reflecting
BLI's contribution for the full 12 months, compared with two months for fiscal
2006, as well as a 4.3% sales increase by ECM, which had stable revenues with
its existing product line during the year. ECM is expected to record
significant growth in 2008, as two high-potential technological platforms will
be brought to market worldwide. The initiatives taken during the year to
arrange private placements for the Company's planned growth, to intensify the
marketing of derivative products from our antimicrobial technology and to
organize their manufacturing and distribution brought our bottom line,
resulting in a net loss of $4.6 million. However, we are confident we will
obtain solid spin-offs from our subsidiaries in upcoming periods, including
from our most recently set-up activities," indicated André Leroux, Chairman of
the Board and Chief Executive Officer.


    Operating Results for the Fiscal Year June 30, 2007
    ---------------------------------------------------

    SELECTED CONSOLIDATED ANNUAL INFORMATION
    (in thousands of $, except per-share amounts)
    -------------------------------------------------------------------------
                                             Fiscal Years Ended June 30,
                                          2007          2006          2005
    -------------------------------------------------------------------------
    Revenues                            12,845         7,666         5,186

    Gross margin                         4,771         3,677         2,513

    EBITDA (loss) before depreciation,
     amortization, financial expenses
     and income taxes                   (2,409)       (1,206)       (2,047)

    Net loss                            (4,623)       (2,496)       (2,580)

    Loss per Class A share
      (basic and diluted)                (0.11)        (0.08)        (0,10)

    Weighted average number of
      Class A shares outstanding
       basic and diluted
       (in thousands)                   41,650        29,992        25,844
    -------------------------------------------------------------------------
    Balance Sheet Data (as at June 30)
    -------------------------------------------------------------------------
                                          2007          2006          2005
    -------------------------------------------------------------------------
    Total assets                        42,243        25,940        12,446
    Shareholders' equity                27,351         8,359         6,135
    Total interest-bearing debt(1)       8,367        10,394         4,663
    Cash, cash equivalents and
     short-term investments             16,960           632         1,265
    -------------------------------------------------------------------------
    (1) Including long-term debt and its current portion, bank advances and
        loans, as well as convertible debentures.


    Consolidated revenues for fiscal 2007 were up by 67.5% or $5.2 million
over the previous year.
    This increase primarily reflects the contribution of BLI, whose fiscal
2007 revenues grew by $4.8 million over 2006, accounting for 93.2% of the
fiscal 2007 revenue growth. For comparative purposes, it should be noted that
BLI, acquired on April 28, 2006, had contributed for only two months to fiscal
2006 consolidated revenues. BLI achieved relatively satisfactory revenues in
fiscal 2007, especially since management and some key resources were partially
mobilized by the setting up of Noveko's new biomedical and environmental
operations and arranging of financing agreements in anticipation of the major
developments planned for this sector. In the fourth quarter, BLI strengthened
its sales force, which raised its order backlog, bringing it to $1.6 million
for the first three months of fiscal 2008.
    ECM's sales rose 4.3% for fiscal 2007, showing stable revenues with its
product line, whereas it is preparing to launch two new major platforms, one
of which (64 channels) will be brought to market in mid-November 2007 and the
other (32 channels) in early January 2008 at international trade shows to be
held respectively in Germany and the United Arab Emirates.
    Noveko Inc. did not record any revenues during fiscal 2007, since its
biomedical and environmental operations were in the development stage. As
indicated in the Events Subsequent to Balance Sheet Date section, Noveko Inc.
achieved the first spin-offs of its antimicrobial technology in August 2007
when it closed sales of $0.4 million of antimicrobial air filters to two
large-scale breeding farms in Ontario and the State of Utah, U.S. as well as
sales of $2.3 million of antimicrobial face masks that immediately followed
the issue by Health Canada of an establishment licence to Noveko Inc. These
spin-offs will be reflected in results for the coming periods.
    The Company posted a gross margin of $4.8 million for fiscal 2007, an
increase of 29.8%. The gross profit margin worked out to 37.1% of sales,
compared with 48.0% for the previous year. This variation is mainly
attributable to the fact that for fiscal 2006, BLI, which records lower profit
margins than ECM, had brought its contribution for only two months due to its
acquisition closing date. Moreover, during the third quarter of fiscal 2007, a
provision had to be taken for certain inventory components that had become
obsolete.
    Selling and administrative expenses amounted to $6.4 million, up by
approximately $2 million or 45% over fiscal 2006. This increase is due to the
following main factors:

    - BLI's contribution for the full 12 months, versus two months for
      fiscal 2006;
    - the marketing expenses of the derivative products from the
      antimicrobial filtration technology, specifically antimicrobial face
      masks and air filters, since the first marketing initiatives were
      undertaken by the subsidiary Noveko Inc. during the fiscal year; and
    - the hiring of key resources by Noveko and its subsidiaries to meet
      expected growth needs in the short and medium term.

    It should be pointed out that selling and administrative expenses as a
percentage of revenues decreased to 49.8% for fiscal 2007, down from 57.5% the
previous year.
    During fiscal 2007, the Company granted 4,250,000 stock options under its
stock option plan for directors, officers and employees, entitling them to
purchase the equivalent number of Class A shares at an weighted average
exercise price of $0.99 with a vesting period extending over 18 months. The
compensation cost for the plan amounted to $707,333 for fiscal 2007, compared
with $9,900 for fiscal 2006.
    Considering these factors, Noveko recorded an operating loss before
amortization, financial expenses and income taxes of $2.4 million for fiscal
2007, compared with an operating loss of $1.2 million the previous year.
However, it should be pointed out that ECM posted operating earnings before
amortization, financial expenses and income taxes (EBITDA) of $251,379 in
2007, as opposed to an operating loss of $175,388 the previous year. This
significant improvement is due mainly to the increase in the subsidiary's
sales and the decrease in its administrative expenses subsequent to the shift
in focus by Noveko Inc. (responsible for the ultrasound scanner related
operations before specializing in biomedical and environmental activities), as
well as tight cost control.
    BLI generated EBITDA of $218,419 for fiscal 2007, whereas it had incurred
an operating loss of $85,964 in 2006. This growth reflects the subsidiary's
contribution for the full fiscal year, compared with two months for fiscal
2006.
    However, these substantial improvements did not compensate for the
significant expenses that had to be incurred during the year, notably to
accelerate the development of the biomedical and environmental operations,
including the effectiveness tests on the antimicrobial technology, the costs
related to the search for financing in North America and Europe and the
strengthening of management team.
    Amortization expenses amounted to $0.9 million, compared with $0.4 million
the previous year. This increase is due mainly to the fact that BLI's
amortization expenses were recognized for the full fiscal year, as opposed to
two months for fiscal 2006, and that the development of operations related to
the new antimicrobial filtration technology was initiated during fiscal 2007.
    Financial expenses doubled over the previous year, to $1.4 million. This
increase primarily reflects - a major variation in BLI's expenses as they were
recognized for the full fiscal year, compared with two months the previous
year - the write-off of deferred financing costs following the early repayment
of the corresponding long-term debt - and the high accreted interest on the
$2.2 million financing arranged in December 2006 by way of secured convertible
debentures maturing on December 29, 2011.
    Income taxes were down by approximately $0.3 million from fiscal 2006.
This reduction is due mainly to BLI's contribution for the full fiscal year,
as opposed to only two months in 2006.
    The net loss for fiscal 2007 amounted to $4.6 million, compared with a net
loss of $2.5 million the previous year. However, it should be noted that the
medical equipment sector significantly reduced its loss, from $0.9 million in
2006 to $0.4 million in 2007. Were it not for the reorganization of the
operations of Noveko Inc. which lowered its net earnings by approximately
$0.5 million and cancelled out the good performance of the French operations.
    The loss per Class A share (basic and diluted) amounted to $0.11 on a
weighted average of 41,649,795 outstanding shares (basic and diluted),
compared with a loss per share of $0.08 on 29,992,478 shares the previous
year. The increased weighted average number of outstanding shares is due to
the various share issues during the year.


    Principal Quarterly Financial Information for the Past Eight Quarters
    ---------------------------------------------------------------------
    (Unaudited)
    -----------
    (in thousands of $, except per-share amounts)

                           First        Second         Third        Fourth
                         Quarter       Quarter       Quarter       Quarter
    -------------------------------------------------------------------------
    Fiscal 2007
    -------------------------------------------------------------------------
    Revenues               2,887         3,474         3,440         3,044
    Net loss                (358)         (340)       (1,602)       (2,323)
    Loss per Class A
     share
     (basic and diluted)  (0.009)       (0.008)       (0.039)       (0.054)
    -------------------------------------------------------------------------
    Fiscal 2006
    -------------------------------------------------------------------------
    Revenues               1,293         1,809         1,807         2,757
    Net loss                (300)         (568)         (354)       (1,274)
    Loss per Class A
     share
     (basic and diluted)  (0.011)       (0.020)       (0.013)       (0.036)
    -------------------------------------------------------------------------
    Fiscal 2005
    -------------------------------------------------------------------------
    Revenues                 559         1,297         1,498         1,832
    Net loss                (178)         (287)         (589)       (1,526)
    Loss per Class A
     share
     (basic and diluted)  (0.011)       (0.011)       (0.021)       (0.058)
    -------------------------------------------------------------------------


    For the fourth quarter of fiscal 2007, consolidated revenues totaled
$3.0 million, up 10.4% over the fourth quarter of fiscal 2006. This increase
is due mainly to the BLI's contribution for the full quarter, as opposed to
two months for the same quarter of the previous year. The operating loss
doubled over the fourth quarter of fiscal 2006, to $1.9 million. This increase
is due mainly to the impact of Noveko Inc.'s reorganization and the new
ultrasound scanner development costs which substantially increased the medical
equipment sector's operating loss. This subsidiary also recorded a slight
decline in sales. In addition to these factors, the intensification of
antimicrobial face mask and air filter marketing initiatives and certain costs
related to the private placement arranged during the period contributed to
lower the net loss to $2.3 million or $0.05 per share, compared with $1.3
million or $0.04 per share for equivalent quarter of the previous year.

    Principal Cash Flows - Available Cash as at June 30, 2007
    ---------------------------------------------------------

    Operating activities, after net change in non-cash working capital, used
cash flows of $2.9 million, compared with $0.6 million in 2006. This change is
due primarily to the increase in the net loss, less the increase in
amortization of fixed assets related mainly to BLI, intangible assets,
write-off of deferred development and financing costs, future income taxes,
accreted interest on secured convertible debentures, stock-based compensation
and net change in non-cash working capital of approximately $1.0 million. The
net change in non-cash working capital can be explained by a decrease of
approximately $0.6 million in accounts payable and an increase of
approximately $0.3 million in prepaid expenses.
    Financing activities provided cash flows of $20.4 million, compared with
$1.9 million for fiscal 2006. This significant variation is due mainly to the
May 2007 issue of Class A shares and warrants which yielded gross proceeds of
approximately $24.0 million, compared with issues of $2.0 million in 2006, as
well as the December 2006 issue of secured convertible debentures for an
amount of $2.2 million. During fiscal 2007, Noveko made a net principal
repayment on long-term debt of $3.0 million and a payment of bank indebtedness
of $1.7 million, compared with net debt repayments totaling $0.8 million in
2006. The Company also paid interest of $0.4 million on secured convertible
debentures in 2007, versus $0.2 million for fiscal 2006.
    Investing activities used cash flows of $15.5 million, including an amount
of $14.3 million for the acquisition of investments. A consideration of $0.8
million was allocated to the purchase of fixed assets, specifically
information technology, leasehold improvements and rolling stock, and an
amount of $0.4 million was recognized as deferred and capitalized development
costs.
    Also considering a $3,925 foreign exchange gain on cash in foreign
currencies, compared with a $21,082 foreign exchange loss the previous year,
aggregate cash inflows and outflows for fiscal 2007 provided net cash flows of
$2.0 million, whereas cash inflows and outflows for the previous fiscal year
used net cash flows of $0.6 million. Noveko ended fiscal 2007 with cash and
cash equivalents of $2.7 million, compared with $0.6 million as at June 30,
2006.

    Financial Position as at June 30, 2007
    --------------------------------------

    The changes in Noveko's financial position between June 30, 2006 and
June 30, 2007 reflect the financing of funding requirements to accommodate its
growth by way of various share and warrant issues and private placements. As
at June 30, 2007, total assets amounted to $42.2 million, up by 62.8% or
$16.3 million over June 30, 2006. Working capital totaled $20.0 million as at
June 30, 2007 for a current ratio of 4.2:1, compared with a deficiency of
$0.2 million as at June 30, 2006.
    As at June 30, 2007, shareholders' equity amounted to $27.4 million, up
from $8.4 million as at June 30, 2006, primarily reflecting - the increase of
$20.6 million in capital stock subsequent to the share issues during the year,
of $0.5 million in the equity component of the secured convertible debentures,
of $3.6 million from the warrants and of $1.2 million from contributed surplus
as well as a slight reduction in the foreign currency translation adjustment -
and a $7.0 million increase in the deficit.
    Long-term debt including the current portion totaled $4.0 million as at
June 30, 2007, compared with $6.0 million as at June 30, 2006. Total
interest-bearing debt (consisting of bank advances and bank loans, current
portion of long-term debt, long-term debt and secured convertible debentures)
amounted to $8.4 million as at June 30, 2007, compared with $10.4 million as
at June 30, 2006, a decrease of approximately $2.0 million that mainly
reflects the year's debt repayments. Deducting available cash, Noveko had
total net debt of $5.7 million, compared with total net debt of $9.8 million
as at June 30, 2006.

    Share Capital Information
    -------------------------

    As at June 30, 2007, Noveko's share capital consisted of
50,615,881 Class A shares, compared with 39,383,879 as at June 30, 2006.
    During the first quarter, the Company issued 1,800,000 units for a total
amount of $900,000, of which $840,000 in cash and $60,000 in consideration of
an amount owed to a supplier. Each unit includes one Class A share and
one-fifth of a warrant, each complete warrant allowing for the purchase of a
single Class A share of the Company at a price of $1.00 per share, and that,
for a period of 24 months following its issuance. A value of $144,000 was
attributed to the warrants granted and the difference of $756,000 was
attributed to capital stock.
    In addition, the Company issued 80,002 Class A shares subsequent to the
exercise of 80,002 stock options for a cash consideration of $58,502 and a
transfer of $39,502 from contributed surplus, as well as 52,000 Class A shares
subsequent to the exercise of 52,000 complete warrants for a cash
consideration of $52,000 and a transfer of $20,800 from warrants.
    At fiscal year-end, on May 30, 2007, Noveko completed a private placement
representing gross proceeds of $23 million. The cash commission paid to the
agents corresponded to 7% of the placement amount, to which was added an issue
of warrants entitling the agents to purchase, at a price of $3.35 per share,
that number of common shares of Noveko as is equal to 7% of the number of
units sold under the offering. Thus, the Company issued 9,200,000 common
shares pursuant to the placement, and 4,600,000 common shares may be issued
upon due exercise of the warrants. A maximum of 644,000 common shares may also
be issued if the broker warrants are exercised during the period of 24 months
following the closing of the placement. These warrants bear a provision for
early exercise at the option of the Company, if the share price is above $4.00
for 20 consecutive trading days commencing the 20th trading day prior to the
expiry of the four-month hold period to which those securities are subject.
    Furthermore, Noveko granted key employees, directors and consultants a
total of 4,250,000 options, including 3,100,000 options in December 2006 at a
price of $0.87 per option, 550,000 options in February 2006 at a price of
$1.31 per option, and 600,000 options in May 2007 at a price of $2.75 per
option, reflecting the market closing prices on the respective issue dates.

    Requirements and Sources of Funds in 2007-2008
    ----------------------------------------------

    During fiscal 2007, Noveko focused significant efforts on arranging the
financing needed for its fiscal 2008 growth by way of several issues and
private placements. It expanded its investor base and increased its market
capitalization more than tenfold, to $225.2 million as at June 30, 2007. In
addition, the exercise of the warrants issued in May 2007 should generate
funds of $15.4 million by the end of May 2009. The funds raised in 2007 by way
of private placements will be used primarily for intensified antimicrobial
face mask and air filter marketing initiatives, product development, new
R&D programs, the safeguarding of patents and working capital.
    The Company plans to actively pursue its revenue growth, to improve its
net earnings and to generate increased cash flows for the fiscal year ending
June 30, 2008. The subsidiaries ECM and BLI should continue to make a
satisfactory contribution to internal growth over the coming year, considering
the sustained market development efforts and planned marketing of new products
that will meet existing demand. For its part, Noveko Inc. benefited from the
first spin-offs its antimicrobial face mask and air filter marketing in early
fiscal 2008. It is finalizing a targeted business strategy and intensifying
its initiatives to solidly establish its distribution networks and new
strategic alliances in order to profit from the great potential of its
antimicrobial product lines worldwide.

    Highlights of the Fourth Quarter
    --------------------------------

    Management Changes - On April 2, 2007, Noveko announced several changes to
the Company's management in the context of its international developments and
in anticipation of its future growth. Thus, André Leroux, founder and Chairman
of the Board, President and Chief Executive Officer, continues to act as
Chairman of the Board and Chief Executive Officer of Noveko International Inc.
Alain Bolduc, formerly Vice-President, Business Development and Industrial
Division of Noveko and President of the subsidiary BLI, was promoted to the
position of President and Chief Operating Officer of Noveko International Inc.
Gaston Lavallée joined Noveko International Inc.'s team as Vice-President,
Business Development. On May 28, 2007, Jacques Tessier was appointed as
Vice-President and Chief Financial Officer.
    Exclusive Distribution Agreement - On April 11, 2007, Noveko announced its
exclusive distribution agreement with Monitrol Inc. (Boucherville, Quebec), a
North American leader in ventilation management software and hardware for farm
buildings with a North American network of 300 distributors and 1,500 sales
agents. Under this agreement, Monitrol Inc. will act as the exclusive
distributor of Noveko's patented antimicrobial air filters for the hog and
poultry breeding markets in North America. This market currently represents
some 125 million linear feet of air filters and potential revenues of
approximately US$1.3 billion from the sale of these filters in North America.
Noveko is confident that this agreement will enable it to achieve a
significant breakthrough in the North American hog and poultry breeding market
over the next two years with its antimicrobial air filters.
    $23 Million Private Placement - In May 2007, Noveko issued 9,200,000 units
for a total amount of $23.0 million in consideration of $23.0 million in cash.
Each unit includes one Class A share and one-half of a warrant, each complete
warrant allowing for the purchase of a single Class A share of the Company at
a price of $3.35 per share, and that, for a period of 24 months following its
issuance. These funds will be used for the marketing of antimicrobial face
masks and air filters, new product development and various other projects
focused on driving the Company's growth.
    FDA 510K Accreditation - In June 2007, Noveko Inc. obtained FDA 510K
accreditation for its two antimicrobial face masks (Noveko 3xEZ and 5dEZR) and
a pre-IDE (investigational device exemption) number to complete its submission
with the latest data. Noveko Inc. is completing its final test protocols in
collaboration with Ciba Expert Services and FDA-accredited Nelson Laboratories
(Utah, U.S.).

    Events Subsequent to Balance Sheet Date
    ---------------------------------------

    Eurasian Patent Obtained - In July 2007, the Eurasian Patent Office,
located in Moscow, delivered a patent for Noveko's antimicrobial filtration
technology. With almost double the population of the United States, Eurasia
represents an important market for Noveko's antimicrobial face masks and
antimicrobial air filters.
    Acquisition of a Building - In July 2007, Noveko acquired a building from
a company whose shareholders exercise significant influence on the Company.
This acquisition was recorded at fair market value and settled by a cash
consideration of $1.2 million.
    Acquisition of Laboratoire SyMa Inc. - In July 2007, Noveko closed the
acquisition of all the shares of SyMa, which specializes in the manufacture of
sanitizers, more specifically the exclusive antimicrobial products sold under
the Azuro trademark. The acquisition was settled by a cash consideration of
$0.5 million and by the issue of 745,156 Class A shares of the Company.
    Establishment Licence Granted by Health Canada - In August 2007, Noveko
was granted an establishment licence by Health Canada, giving it the green
light for the Canadian marketing of its antimicrobial face masks to healthcare
institutions (hospitals, medical clinics, dental clinics, etc.), government
organizations, civil relief units and the general public.
    First Sales of Antimicrobial Air Filters - In August 2007, Noveko closed
first sales of $0.4 million of antimicrobial air filters to large hog breeding
farms in Ontario and the United States.
    First Canadian Sales of Antimicrobial Face Masks - In August 2007, Noveko
closed first sales of $2.3 million of antimicrobial face masks to Medi-Select,
a leader in the distribution of medical equipment and supplies.
    Conversion of Debentures - In July and September 2007, convertible
debentures for an amount of $1,362,000 were converted into 1,547,728 Class A
shares.
    Noveko Head Office Move - In September 2007, Noveko moved its head office
from Lachine, Quebec to a recently acquired building located in Terrebonne,
Quebec in order to achieve efficiency gains and to better accommodate its
future growth.
    Agreement with China National Service Corporation - In October 2007,
Noveko signed an agreement with China National Service Corporation ("CNSC"),
one of China's most prominent state-owned companies, dealing with the
businesses of international cooperation, service and Chinese government
sponsored projects worldwide. This agreement aims to promote Noveko's
antimicrobial filtration technology to all levels of Chinese government and
its related food and health organizations, to obtain the government
authorizations required for the marketing of Noveko's antimicrobial face masks
and antimicrobial air filters, and to develop the supporting sales and
distribution channels in China. CNSC is responsible for providing Noveko with
monitoring and enforcement services in the Chinese market to prevent any
infringement of Noveko's intellectual property rights and trademarks.
    First Pig Farm in China Equipped with Noveko's Antimicrobial Air Filters -
In October 2007, Noveko signed a cooperation agreement with the Ma'anshan
Agriculture Culture (Anhui Province, China) to equip a first pig farm with
Noveko's antimicrobial air filters in the coming months in order to
demonstrate this technology's performance and to market it on a larger scale.
    Grant of Stock Options - On October 25, 2007, the Board of Directors
approved the grant of 2,000,000 stock options to employees, directors and
consultants, entitling them to acquire Class A shares at a price of $6.80
(representing the closing price of the Class A shares as at October 24, 2007.)
These options may be exercised as of their grant date over an 18-month period,
until October 2012.

    Profile as at October 26, 2007
    ------------------------------

    Noveko International Inc. currently has four subsidiaries: S.A.S. ECM,
Noveko Inc., Laboratoire SyMa Inc. ("SyMa") and Bolduc Leroux Inc. (BLI). ECM
specializes in the design and marketing of portable real-time ultrasound
scanners for use in veterinary and human medicine. Noveko Inc. develops the
Company's biomedical and environmental business, specifically its patented
antimicrobial filtration technology and derivative products (antimicrobial
face masks and air filters). SyMa specializes in the manufacture of
sanitizers, more specifically the antimicrobial products (for hands, feet and
surfaces) sold under the Azuro trademark. For its part, BLI specializes in the
custom processing and distribution of steel products based on client
specifications and designs. It has also developed and markets a line of
downdraft particle extraction tables for various markets. Operating since
September 2002, the Company was listed on the TSX Venture Exchange on
February 3, 2004.

    The information set forth in this press release includes certain
forward-looking statements. Such statements depend on a certain number of
factors and involve risks and uncertainties. Actual results could differ from
forecasts. The information contained in this press release is dated October
25, 2007, the date on which the release was approved. Unless required to do so
by law, the Company assumes no obligation as to the updating or revision of
these forward-looking statements as a result of new information or future
events.


    NOVEKO INTERNATIONAL INC.
    Consolidated balance sheets

    as at June 30, 2007 and 2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2007          2006
    -------------------------------------------------------------------------

    Assets
    Current assets:
      Cash and cash equivalents                 $  2,668,494  $    626,094
      Short-term investments                      14,291,887         5,634
      Accounts receivable                          2,494,052     2,527,231
      Inventories                                  3,276,904     3,621,741
      Prepaid expenses                               502,982       261,178
      Investment in Canadian Immigrant
       Investor Program                            3,087,423             -
      Current portion of grant receivable                  -        95,000
    -------------------------------------------------------------------------
                                                  26,321,742     7,136,878

    Fixed assets                                   5,605,250     5,302,859
    Intangible assets                              1,656,586     1,774,199
    Other assets                                     911,354     1,031,277
    Grant receivable                                       -        95,001
    Investment in Canadian Immigrant
     Investor Program                                      -     2,942,387
    Future income taxes                              680,706       636,989
    Goodwill                                       7,067,385     7,020,682
    -------------------------------------------------------------------------
                                                $ 42,243,023  $ 25,940,272
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity
    Current liabilities:
      Bank advances                             $     18,287  $  1,593,948
      Bank loan                                            -        88,000
      Accounts payable and accrued liabilities     2,422,273     3,015,849
      Loans under Canadian Immigrant
       Investor Program                            3,087,423             -
      Current portion of long-term debt              801,029     2,620,146
    -------------------------------------------------------------------------
                                                   6,329,012     7,317,943

    Long-term debt                                 3,158,442     3,409,407
    Secured convertible debentures                 4,389,576     2,682,651
    Loans under Canadian Immigrant
     Investor Program                                      -     2,942,387
    Future income taxes                            1,014,814     1,228,907

    Shareholders' equity:
      Capital stock                               33,570,722    12,976,804
      Portion of secured convertible
       debentures included in equity                 918,735       404,665
      Warrants                                     4,667,446     1,090,000
      Contributed surplus                          1,325,504        85,673
      Foreign currency translation adjustment       (458,974)     (504,418)
      Deficit                                    (12,672,254)   (5,693,747)
      -----------------------------------------------------------------------
                                                  27,351,179     8,358,977
    -------------------------------------------------------------------------
                                                $ 42,243,023  $ 25,940,272
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NOVEKO INTERNATIONAL INC.
    Consolidated statements of operations

    Years ended June 30, 2007 and 2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2007          2006
    -------------------------------------------------------------------------
    Revenues                                    $ 12,844,715  $  7,666,447

    Cost of sales                                  8,074,095     3,989,382
    -------------------------------------------------------------------------
                                                   4,770,620     3,677,065

    Operating expenses:
      Administrative and selling expenses          6,396,320     4,410,364
      Stock-based compensation                       707,333         9,900
      Research and development                       262,175       541,270
      Research and development tax credits          (186,410)      (78,893)
      -----------------------------------------------------------------------
                                                   7,179,418     4,882,641
    -------------------------------------------------------------------------
    Loss before amortization, financial
     expenses and income taxes                    (2,408,798)   (1,205,576)

    Amortization                                     901,193       432,803
    Financial expenses                             1,374,690       660,615
    -------------------------------------------------------------------------
                                                   2,275,883     1,093,418
    -------------------------------------------------------------------------
    Loss before income taxes                      (4,684,681)   (2,298,994)

    Income taxes :
      Current                                        196,351       275,769
      Future                                        (257,810)      (78,519)
      -----------------------------------------------------------------------
                                                     (61,459)      197,250
    -------------------------------------------------------------------------
    Net loss                                    $ (4,623,222) $ (2,496,244)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted earnings per share        $      (0.11) $      (0.08)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of outstanding
     shares, basic and diluted                    41,649,795    29,992,478
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NOVEKO INTERNATIONAL INC.
    Consolidated statements of deficit and contributed surplus

    Years ended June 30, 2007 and 2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2007          2006
    -------------------------------------------------------------------------
    DEFICIT

    Deficit, beginning of year                  $ (5,693,747) $ (3,100,805)

    Net loss                                      (4,623,222)   (2,496,244)

    Share, warrant and convertible debenture
     issuance fees                                (2,355,285)      (96,698)
    -------------------------------------------------------------------------
    Deficit, end of year                        $(12,672,254) $ (5,693,747)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    CONTRIBUTED SURPLUS

    Contributed surplus, beginning of year      $     85,673  $     75,773

    Fair value of stock options granted              707,333         9,900

    Warrants expired                                 572,000             -

    Fair value of stock options exercised            (39,502)            -
    -------------------------------------------------------------------------
    Contributed surplus, end of year            $  1,325,504  $     85,673
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NOVEKO INTERNATIONAL INC.
    Consolidated statements of cash flows

    Years ended June 30, 2007 and 2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        2007          2006
    -------------------------------------------------------------------------

    Cash flows from operating activities:
      Net loss                                  $ (4,623,222) $ (2,496,244)
      Adjustments for:
        Future income taxes                         (257,810)      (78,519)
        Accreted interest on secured
         convertible debentures                      436,995       311,440
        Stock-based compensation                     707,333         9,900
        Gain (loss) on disposal of fixed assets       (6,037)        2,873
        Amortization of discounts on bonds             2,517             -
        Amortization                                 901,193       432,803
        Amortization - deferred financing
         costs and write-off                         278,710        55,930
        Write-off of deferred development costs            -       300,456
        Foreign exchange loss                          2,132        21,082
        ---------------------------------------------------------------------
                                                  (2,558,189)   (1,440,279)
      Net change in non-cash working capital        (336,776)      841,869
      -----------------------------------------------------------------------
                                                  (2,894,965)     (598,410)

    Cash flows from financing activities:
      Net changes in bank advances                (1,663,661)     (290,200)
      Increase in long-term debt                   1,063,824     1,349,861
      Grant receipt                                   45,001             -
      Principal repayment on long-term debt       (2,995,731)     (887,786)
      Interest paid on secured convertible
       debentures                                   (416,000)     (173,333)
      Proceeds from convertible debentures
       issued                                      2,200,000             -
      Proceeds from Class A shares and warrants
       issued                                     23,950,502     1,950,000
      Class A shares issue expenses               (1,749,925)      (96,698)
      -----------------------------------------------------------------------
                                                  20,434,010     1,851,844

    Cash flows from investing activities:
      Business acquisition                                 -      (727,685)
      Net changes in advances to shareholders         25,298      (397,478)
      Acquisition of short-term investments      (14,288,718)            -
      Acquisition of fixed assets                   (772,843)     (150,963)
      Proceeds from disposal of fixed assets          38,763        17,327
      Acquisition of intangible assets               (38,007)      (50,574)
      Deferred financing fees                       (104,350)     (135,010)
      Deferred development costs, net of
       related research tax credits received        (360,713)     (421,026)
      -----------------------------------------------------------------------
                                                 (15,500,570)   (1,865,409)

    Foreign exchange gain (loss) on cash in
     foreign currencies                                3,925       (21,082)
    Increase (decrease) in cash and cash
     equivalents                                   2,042,400      (633,057)
    Cash and cash equivalents, beginning of year     626,094     1,259,151
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year      $  2,668,494  $    626,094
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash flows related to operating activities include interest paid of
$776,607 ($427,711 in 2006) and income taxes paid of $331,249 ($361,239 in
2006).
    




For further information:

For further information: André Leroux, Chairman of the Board and Chief
Executive Officer; Jacques Tessier, Vice-President and Chief Financial
Officer, Noveko International Inc., (514) 344-3030; www.noveko.com

Organization Profile

Noveko International Inc.

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