Biorem Reports Second Quarter 2017 Results

GUELPH, ON, Aug. 30, 2017 /CNW/ - BIOREM Inc. (TSX-V: BRM) ("Biorem" or "the Company") today announced results for the three and six-month periods ended June 30, 2017. Biorem's complete second quarter financial statements and MD&A have been filed on SEDAR (www.sedar.com).

FINANCIAL HIGHLIGHTS:

in '000's except earnings per share
	Three-months ended		Six -months ended
	June 30		June 30
	2017	2016	2017	2016
Revenue	5,672	2,942	8,755	7,134
Gross profit	1,261	554	2,405	1,997
Operating expenses	1,329	572	2,460	1,540
Ebitda*	(58)	-	(37)	482
Net earnings (loss)	(68)	(113)	(50)	261
EPS - basic	-	(0.01)	-	0.02
EPS - fully diluted	-	(0.01)	-	0.01
* Earnings before interest, taxes and amortization, a non-IFRS financial measure

Biorem's revenues for the second quarter were $5.7 million, a 93% increase over the same quarter in 2016. Year-to-date revenues totaled $8.8 million, a $1.6 million or 23% increase in revenue over the first six months of 2016. The increase in revenues in the second quarter was due to a higher order backlog at the beginning of the period.

Gross profit for the quarter was $1.3 million or 23% of revenue compared to $554,000 of gross profit recorded during the second quarter of 2016. Total operating expenses (net of other income) for the quarter were $1,329,000 against $572,000 in the same period the prior year. The increase in operating expenses was primarily due to a $460,000 difference in foreign exchange loss recorded between the two quarters, and a $183,000 increase in sales and marketing costs directly attributable to the higher revenues in the second quarter of 2017. Ebitda loss for the quarter was $58,000 compared to a breakeven in the second quarter of 2016.

Net loss for the quarter was $68,000. The year-to-date loss was $50,000 compared to net earnings of $261,000 for the first half of 2016.

"Financial performance for the second quarter was in line with management expectations," indicated Derek S. Webb, President and CEO. "The financial results were negatively impacted by two significant factors. The first was the Canadian and US currency exchange rate, which had a negative impact of $282,000. The second was due to delivery of a strategic project booked in late 2016 at lower margins. This single project amounted to 40% of the quarter's revenues and provided downward pressure on gross margins. The project provided significant contribution to the income statement and was delivered ahead of schedule. It represented a one-time strategic pricing decision to ensure our continued leadership in the American market and does not reflect our expectations for future pricing. Booking rates continue to be at all time high with normal rates of margin."   

Unrestricted cash on hand decreased during the quarter to $2.4 million from $4.3 million on March 31, 2017. Operating activities generated $218,000 of new cash but increased operating activities during the quarter resulted in $2.7 million of cash being invested in non-cash working capital particularly accounts receivable and unbilled revenue.

Bookings during the quarter were $8.7 million resulting in an order backlog of $22.7 million on June 30, 2017.

About BIOREM Inc.

BIOREM is a leading clean technology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds (VOCs), and hazardous air pollutants (HAPs). With sales and manufacturing offices across the continent, a dedicated research facility, a worldwide sales representative network and more than 1,100 installed systems worldwide, BIOREM offers state-of-the-art technology-based products and peace of mind for municipalities, industrial companies and their surrounding communities. Additional information on Biorem is available on our website at www.biorem.biz.

SOURCE Biorem Inc.

Derek Webb, President and Chief Executive Officer, [email protected], Tel: [phone]; or Douglas Newman, Chief Financial Officer, [email protected], Tel: [phone]