TORONTO, Feb. 12 /CNW/ - Organic Resource Management Inc. (TSX: ORI)
("ORMI" or "the Company"), today announced the financial results for the three
and six-month periods ended December 31, 2008.
Q2 2009 Highlights:
- Sold non-core assets of wholly-owned subsidiary, A&A Anderson Tank
Services Ltd. ("A&A")
- Total revenue of $3,217,000 compared to $3,800,000 in Q2 2008
- Gross margin of $1,038,000 compared to $1,264,000 in Q2 2008
- Net income before taxes of $1,542,000 compared to $124,000 in Q2 2008
- Contingency related to a material statement of claim for a motor
- Established a line of credit with Royal Bank of Canada
"During the quarter we took steps to focus on our core grease trap and
organic waste disposal business through the sale of the non-core assets of A&A
Anderson Tank Services Ltd. Following the completion of this transaction, we
also rebranded our remaining British Columbia assets as ORMI, in order to
develop a cohesive national brand," said Charles Buehler, Chairman and Chief
Executive Officer of ORMI.
Net income before taxes for the second quarter of fiscal 2009 was
$1,542,000, an increase of $1,418,000 from $124,000 for the second quarter of
fiscal 2008. The increase was due to the gain of $1,708,000 on the sale of
A&A's non-core assets. This gain was partially offset by approximately
$180,000 in one-time costs related to the sale and rebranding of ORMI's
remaining assets in British Columbia from A&A to ORMI, as well as the
relocation to a new Vancouver facility.
Revenue for the three-months ended December 31, 2008 was $3,217,000, a
decrease of $583,000 compared to $3,800,000 during the second quarter of last
year. The decrease in revenue was largely attributable to the divestiture of
A&A's non-core assets as well as ORMI's decision to exit the compactor rental
business in January 2008.
Total gross margin for the period ended December 31, 2008 was $1,038,000,
a decrease of 18% or $226,000 from $1,246,000 compared to the second quarter
of last year. Gross margin as a percentage of revenue was 32% during the
second quarter, compared to 33% during the same period last year. During the
quarter, the Company continued to use disposal sites in Ontario and New York
that were sourced earlier this year, which contributed to higher margins in
the Ontario market. The overall reduction in gross margin was due to the lower
revenue, as well as the additional rent and one-time costs stemming from the
relocation to the new Vancouver facility and the divestiture and rebranding of
A&A's non-core assets.
Cash flows from operating activities were $338,000 for the three-months
ended December 31, 2008, compared to cash used in operating activities of
$162,000 for the same period last year. The improvement was largely due to a
$706,000 decrease in accounts receivable following the divestiture of A&A's
Net income before taxes for the six-month period ended December 31, 2008
was $1,818,000, an increase of $1,521,000 from $297,000 for the same period
last year. Total revenue for the period was $7,265,000, a decrease of $258,000
compared to $7,523,000 for the six-month period ended December 31, 2007. Total
gross margin for the six-month period ended December 31, 2008 was $2,555,000,
an increase of $93,000 compared to $2,462,000 for the same period last year.
Gross margin as a percentage of revenue was 35% compared to 33% during the
six-month period ended December 31, 2007.
On February 3, 2009 the Company received a statement of claim in the
amount of $31 million pertaining to a traffic accident which occurred in
September 2008. The claim by the injured party exceeds the combined limit of
the Company's insurance coverage of $10 million. The outcome of this claim is
not determinable at this time and accordingly, no provision has been
established in the Company's consolidated financial statements for the period
ended December 31, 2008.
On February 6, 2009, the Company established a $2,000,000 revolving
demand facility and a $500,000 term facility with the Royal Bank of Canada.
The Company also ended its relationship with Textron Financial Canada Ltd. and
paid off the balance owing on its asset-based revolving loan.
The comparative financial statements for the three and six-months ending
December 31, 2008 along with other information may be obtained through the
Company's website at www.ormi.com, or on SEDAR at www.sedar.com.
This press release is available on the Company's official on-line
investor relations site for investor commentary, feedback and questions.
Investors are asked to visit the investor relations section of the Company's
website at http://www.ormi.com/ORMI_Investor.asp. Alternatively, investors are
asked to e-mail all questions and correspondence to Info@ormi.com where they
can also request addition to the Company's investor e-mail list to receive all
future press releases and updates directly.
About Organic Resource Management Inc.
Organic Resource Management is Canada's largest provider of vacuum truck
services for the collection, processing and disposal of food-related organic
residuals. ORMI services in excess of 6,000 commercial, industrial,
institutional and residential customers in Ontario, Quebec, and British
Columbia. Further information about ORMI may be obtained at the Company's web
site at www.ormi.com.
Note: Certain information contained in this press release may be forward-
looking and therefore subject to unknown risks or uncertainties. The
actual results, performance or achievements of Organic Resource
Management Inc. may differ materially from the results, performance or
achievements of the Company expressed or implied by such forward-looking
For further information:
For further information: Organic Resource Management Inc., Charles
Buehler, Chairman and CEO, Tel: (416) 580-8574, Email: email@example.com,
Website: www.ormi.com; The Equicom Group, Glen Williams, Investor Relations,
Tel: (416) 815-0700 ext. 272, Email: firstname.lastname@example.org