Bennett Environmental Announces Q2 2004 Results.OAKVILLE, Ontario Oakville (2006 population 165,613[2]) is a town on Lake Ontario in southern Ontario, Canada, midway between Toronto (about 31 km or 19 mi away) on its eastern border and Hamilton (about 20 km or 12 mi away) from its western border. -- Bennett Environmental Bennett Environmental TSX: BEV AMEX: BEL is a Canadian company based in Oakville, Ontario. It specializes in the recovering of soils contaminated with chlorinated hydrocarbons, including PCB's and PCP's, Dioxins and Furans. Inc. (AMEX AMEX See: American Stock Exchange :BEL Bel (bāl, bĕl), deity of the Middle Eastern religions. The name is a cognate of that of Baal. For Bel in the Bible, see Bel and the Dragon. ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BEV), a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. leader in the high temperature treatment of contaminated contaminated, v 1. made radioactive by the addition of small quantities of radioactive material. 2. made contaminated by adding infective or radiographic materials. 3. an infective surface or object. soils, announces Q2 revenue of $3,894,643 and a loss of $2,150,420. This compares with revenues of $13,369,587 and earnings of $2,162,824 in the same period a year ago. The Company had a loss of $0.12 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the quarter versus a profit of $0.13 per fully diluted share in the same quarter in 2003. Total volumes processed during the quarter were 4,000 tonnes versus 13,000 tonnes for the same period last year. The operation of Bennett's Saint Ambroise Ambroise (flourished c. 1190) was a Norman poet and chronicler of the Third Crusade, author of a work called L'Estoire de la guerre sainte, which describes in rhyming French verse the adventures of Richard Coeur de Lion as a crusader. , Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. , thermal treatment Thermal treatment is a term given to any waste treatment technology that involves high temperatures in the processing of the waste feedstock. This commonly, although not exclusively involves the combustion of waste materials. facility resumed in late May following an unscheduled unscheduled Adjective not planned or intended Adj. 1. unscheduled - not scheduled or not on a regular schedule; "an unscheduled meeting"; "the plane made an unscheduled stop at Gander for refueling" two month shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down due to lack of soil, and shipments of soil were less than expected through the month of June June: see month. . The Company expects that the volumes of soil processed in the third quarter of 2004 will be comparable to the same period last year, when 20,000 tonnes were treated. Fourth quarter volumes are expected to be a minimum of 20,000 tonnes. At the end of the second quarter, storage was about 1,000 tonnes and is expected to increase to over 10,000 tonnes by the end of the third quarter in September September: see month. . The Saint Ambroise facility is expected to operate at about 80% of capacity overall this quarter. Construction of the Company's new plant in Belledune, New Brunswick Belledune (2006 population: 1,711) is a Canadian village in Gloucester County, New Brunswick. Located on Chaleur Bay, the village was amalgamated in 1994 with the community of Jacquet River. , is currently 95% complete and the plant will enter the commissioning phase, as planned, within the next month. Bennett plans to complete compliance testing and receive an operating permit in the fourth quarter. However, the Company is dependent on the soil delivery schedule from the Federal Creosote creosote (krē`əsōt), volatile, heavy, oily liquid obtained by the distillation of coal tar or wood tar. Creosote derived from beechwood tar has been used medicinally as an antiseptic and in the treatment of chronic bronchitis. project in New Jersey to begin production at Belledune. Only when it is clear that sufficient volumes of shipments will be received for processing at Belledune, will the facility begin operations. This will ensure that the Company can most effectively manage costs and protect margins until greater volumes of soil are assured. "Our second quarter results are very disappointing and not representative of the potential of this company," said Allan Allan can refer to:
v. To moderate in force or intensity. mit  i·ga tion n. the impact of low soil
deliveries. However, our challenge remains to have a constant flow of
material from a variety of projects through the remainder of the year.
We want to ensure sufficient inventory in our storage facilities by
year-end year-end also year·endn. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. as we enter into the winter months." "To secure higher and more stable inventories of soil from a variety of sources, we have begun a series of initiatives to build our sales organization," said Mr. Bulckaert. "Over the past month, we have added two seasoned sales executives to our U.S. sales staff. This is the first time Bennett has had experienced sales executives on the ground full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full in the U.S. We are also in discussions with other soil treatment companies with the goal of forming new sales partnerships." "I am also pleased to announce that, effective September 6, 2004 Andy Boulanger Bou·lan·ger , Nadia Juliette 1887-1979. French music teacher of several modern American composers, including Virgil Thomson and Aaron Copland. will join Bennett as Chief Financial Officer. Andy replaces Rick Stern, who is leaving the Company on September 30. Rick has ably served Bennett as CFO See Chief Financial Officer. for the past four years. Andy brings a wealth of senior level, public company experience and has strong financial and operational skills." Finally, Bennett will be closing its Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. office and consolidate all accounting and administrative functions in Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing by December December: see month. 31, 2004. "Bennett has not lost its ability to generate high margins on the treatment of healthy volumes of soil," said Mr. Bulckaert. "As we return to higher operating levels, our results will improve dramatically and I am confident we can make significant progress within the next year." The financial outlook for the Company remains strong. The Company has a healthy balance sheet with cash on hand of $13,940,484, untapped lines of credit of $10,000,000 and 90% of the Belledune expenditures completed. The Company expects to be cash flow positive in the third and fourth quarters of 2004 and beyond. Results of Operations The Company's operating costs operating costs npl → gastos mpl operacionales of $3,626,903 for the second quarter were lower than the $6,503,884 for the same period last year and reflect the significantly lower plant utilization in the quarter. In total, 4,000 tonnes of soil were processed in the quarter compared to 13,000 tonnes for the same period last year. Plant capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. was approximately 16% and was limited by a lack of soil for processing for two months throughout the quarter. Administrative and Business Development costs of $2,746,786 were overall, slightly higher than the $2,612,308 incurred in the same quarter in 2003. However, included in Q2 2003 Administration and Business Development expenses were $921,046 for stock based compensation versus $169,059 included in the Q2 2004 expenses. Adjusted for this item, increased expenditures of $886,465 for insurance, salaries and legal and professional fees comprised the bulk of the increase. Effective January January: see month. 1, 2004, the Company adopted the amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. recommendations of the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. for accounting for stock based compensation. The amended recommendations have been applied retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin , with restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior periods. Amortization and depreciation was $624,387 for the quarter and reflects the increase in depreciation for the new storage facility constructed at the Saint Ambroise plant in mid 2003 and depreciation of assets and operating permits associated with the Eco Logic International purchase in late 2003. The Company has cash of $13,940,484 after the expenditure of $8,919,696 in the quarter for the construction of the new facility in Belledune, New Brunswick. The Company also has an untapped line of credit of $10,000,000 at its disposal and has no plans at this time for its use. Receivable balances of $22,848,068 are down significantly from year-end and are expected to be further reduced in the third quarter due to the payment of outstanding invoices by the Government of Canada The Government of Canada is the federal government of Canada. The powers and structure of the federal government are set out in the Constitution of Canada. In modern Canadian use, the term "government" (or "federal government") refers broadly to the cabinet of the day and as part of a negotiated payment schedule negotiated payment schedule Negotiated fee schedule, see there for the Saglek Labrador project. The balance of outstanding shares at June 30, 2004 was 18,345,339. About Bennett Environmental Inc. Bennett Environmental Inc. is a North American leader in high temperature treatment services for the remediation of contaminated soil and has provided thermal solutions to contamination problems throughout Canada and the US. Bennett Environmental's proprietary technology provides for the safe, economical and permanent solution to contaminated soil. Independent testing has consistently proven that the technology operates well within the most stringent criteria in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Bennett Environmental is listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. ("BEV") and the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. ("BEL"). Notes regarding forward-looking information This news release includes statements about expected future events and/or financial results that are forward looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbour for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. provisions contained in the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. The Company cautions that actual performance will be affected by a number of various factors, many of which are beyond the Company's control. Discussions of the various factors that may affect future results are contained in the Company's filings with the Securities and Exchange Commission and Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. .
BENNETT ENVIRONMENTAL INC.
Consolidated Balance Sheets
(Expressed in Canadian dollars)
As at June 30, 2004 with comparative figures
As at December 31, 2003
--------------------------------------------------------------------
--------------------------------------------------------------------
June 30 December 31
2004 2003
--------------------------------------------------------------------
(unaudited) (Audited)
(Restated -
Note 2)
Assets
Current assets
Cash and cash equivalents $ 13,940,484 $ 12,586,353
Accounts receivable 22,848,068 29,012,175
Income tax receivable 1,235,588 -
Work-in-progress 37,973 151,893
Prepaid expenses and other 3,145,739 2,154,983
--------------------------------------------------------------------
41,207,852 43,905,404
Investment 501,593 568,193
Property plant and equipment 41,008,052 23,779,384
Other assets 7,341,997 6,777,953
Goodwill 646,638 646,638
--------------------------------------------------------------------
$ 90,706,132 $ 75,677,572
--------------------------------------------------------------------
--------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 4,171,263 $ 9,964,937
Income taxes payable - 2,961,632
Current portion of long-term debt 9,543 4,601
--------------------------------------------------------------------
4,180,806 12,931,170
Future income tax liability 2,586,506 2,616,861
Deferred revenue - 814,409
Long-term debt 303,242 417,143
Shareholders' equity
Share capital 55,563,951 28,397,470
(Common shares outstanding 18,345,339
(2003 - 17,145,789))
Contributed surplus 1,258,147 1,201,776
Retained earnings 26,813,480 29,298,743
--------------------------------------------------------------------
83,635,578 58,897,989
$ 90,706,132 $ 75,677,572
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Operations and Retained Earnings (Deficit)
(Expressed in Canadian dollars)
For the Six-Month Period Ended June 30, 2004 with comparative figures
for the Six-Month Period Ended June 30, 2003, and the Three-Month
Period Ended June 30, 2004 with the comparative figures for the
Three-Month Period Ended June 30, 2003
--------------------------------------------------------------------
--------------------------------------------------------------------
6 months 3 months
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
--------------------------------------------------------------------
(unaudited) (unaudited)(unaudited) (unaudited)
Sales $12,836,827 $25,419,700 $3,894,643 $13,369,587
Interest and other
income 250,077 333,831 129,198 65,551
--------------------------------------------------------------------
13,086,904 25,753,531 4,023,841 13,435,138
Expenses
Operating costs 9,309,846 11,677,955 3,626,903 6,503,884
Administration and
business development 5,828,772 4,581,937 2,746,786 2,612,308
Amortization 1,281,724 847,209 624,387 406,034
Foreign exchange (75,140) 481,319 (71,452) 265,653
--------------------------------------------------------------------
Interest expenses 48,301 50,921 22,733 14,207
--------------------------------------------------------------------
16,393,503 17,639,341 6,949,357 9,802,086
--------------------------------------------------------------------
Earnings (loss) before
income taxes (3,306,599) 8,114,190 (2,925,516) 3,633,052
Income tax expense
Current (1,260,296) 2,986,973 (1,318,061) 1,356,801
Future 438,960 50,000 542,965 113,427
--------------------------------------------------------------------
(821,336) 3,036,973 (775,096) 1,470,228
Net earnings (loss) (2,485,263) 5,077,217 (2,150,420) 2,162,824
Retained earnings
(deficit), beginning
of period 29,298,743 11,621,859 28,963,900 14,716,556
Retained earnings,
end of period $26,813,480 $16,699,076 $26,813,480 $16,879,380
--------------------------------------------------------------------
--------------------------------------------------------------------
Basic earning per
share $ (0.14) $ 0.30 $ (0.12) $ 0.13
--------------------------------------------------------------------
--------------------------------------------------------------------
Fully diluted
earnings per share $ (0.14) $ 0.30 $ (0.12) $ 0.13
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Cash Flows
(Expressed in Canadian dollars)
For the Six-Month Period Ended June 30, 2004 with comparative
figures for the Six-Month Period Ended June 30, 2003, and the
Three-Month Period Ended June 30, 2004 with the comparative figures
for the Three-Month Period Ended June 30, 2003
--------------------------------------------------------------------
--------------------------------------------------------------------
6 months 3 months
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
--------------------------------------------------------------------
(unaudited)(unaudited) (unaudited) (unaudited)
CASH PROVIDED BY
(USED IN):
Operations
Net earnings (loss) $(2,485,263) $5,077,217$(2,150,420) $2,162,824
Items not involving
cash
Amortization 1,281,724 847,209 624,387 406,034
Equity investment loss 66,600 - 33,301 -
Increased stock-based
compensation 338,118 1,101,350 169,059 921,046
Shares issued for
services rendered - 2,840 - 2,840
Future income taxes 438,960 50,000 542,965 113,427
Deferred revenue (814,409) - (93,321) -
--------------------------------------------------------------------
(1,174,270) 7,078,616 (874,029) 3,606,171
Change in non-cash
operating working
capital
Accounts receivable 6,164,107 (3,657,691) 3,258,897 (1,570,341)
Income taxes
receivable (1,235,588) - (1,235,588) -
Work-in-progress 113,920 143,352 56,960 197,039
Prepaid expenses and
other (990,756) (1,263,640) 92,603 173,773
Accounts payable and
accrued liabilities(5,793,674) (2,211,466) (1,636,499) 15,203
Income taxes payable(2,961,632) (4,998,607) (143,400) (871,852)
--------------------------------------------------------------------
(4,703,623)(11,988,052) 392,973 (2,056,178)
Financing activities
Repayments of
long-term debt (108,959) (523,123) (2,183) (259,731)
Share capital, issued
for cash 26,415,418 676,840 460,216 188,126
--------------------------------------------------------------------
26,306,459 153,717 458,033 (71,605)
Investing activities
Purchase of capital
assets (18,320,391) (3,450,467) (8,919,696) (1,924,069)
Increase in other
assets (754,044) (556,271) (348,368) (494,789)
--------------------------------------------------------------------
(19,074,435) (4,006,738) (9,268,064) (2,418,858)
Decrease in cash and
cash equivalents 1,354,131 (8,762,457) (9,291,087) (940,470)
Cash and cash
equivalents,
beginning of period 12,586,353 19,267,639 23,231,571 11,445,652
--------------------------------------------------------------------
Cash and cash
equivalents, end of
period $13,940,484 $10,505,182 $13,940,484 $10,505,182
--------------------------------------------------------------------
--------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
Supplementary disclosure of cash flow information:
Cash paid for:
Interest paid 30,118 17,721 12,028 15,536
Income taxes paid 4,073,650 7,985,580 103,650 -
Notes to the Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (UNAUDITED) 1. Basis of Presentation: These consolidated interim financial statements have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting for interim financial statements and accordingly, do not include all disclosures required for annual financial statements. In the opinion of management, all adjustments, including reclassifications and normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. adjustments necessary to present fairly the financial position, results of operations and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. , and cash flows at June 30, 2004 and for all periods presented, have been made. Interim results are not necessarily indicative of the results for a full year. These consolidated interim financial statements should be read in conjunction with the December 31, 2003 annual financial statements and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in the 2003 Annual Report. 2. Change in accounting policies: These consolidated interim financial statements follow the same accounting policies and methods of application as our annual consolidated financial statements, except for the following: Effective January 1, 2004, the Company adopted the amended recommendations of the Canadian Institute of Chartered Accountants ("CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) ") for accounting for stock-based compensation. The amended standard requires recognition of an estimate of the fair value of stock-based awards in earnings. Previously, the Company provided note disclosure of pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income as if a fair value based method had been used. The amended recommendations have been applied retroactively, with restatement of prior periods. The restatement at January 1, 2004 resulted in an increase to share capital at December 31, 2003 of $493,601 (2002 - $4,498), contributed surplus of $1,201,776 (2002 - $492,077) and a decrease to retained earnings of $1,695,377 (2002 - $496,575). The adjustments represent the total compensation expense which would have been recorded had a fair value based method been used for stock options granted after January 1, 2002 and adjustments for exercised options. Compensation expense related to stock options for the three and six months ended June 30, 2004 is $169,059 and $338,118 respectively (three months ended June 30, 2003 - $921,046, six months ended June 30, 2003 - $1,101,350).
--------------------------------------------------------------------
--------------------------------------------------------------------
As previously
Reported Adjustment Restated
--------------------------------------------------------------------
As at December 31, 2002:
Retained earnings $11,621,859 ($496,575) $11,125,284
Share capital 2,388,2001 4,498 23,886,499
Contributed surplus - 492,077 492,077
--------------------------------------------------------------------
As at December 31, 2003:
Retained earnings 30,994,120 (1,695,377) 29,298,743
Share capital 27,903,869 493,601 28,397,470
Contributed surplus - 1,201,776 1,201,776
--------------------------------------------------------------------
3 months ended June 30, 2003:
Admin. and business development 1,691,262 921,046 2,612,308
Net earnings 3,083,870 (921,046) 2,162,824
Basic earnings per share 0.18 0.13
Fully diluted earnings per share 0.18 0.13
--------------------------------------------------------------------
6 months ended June 30, 2003:
Admin. and business development 3,480,587 1,101,350 4,581,937
Net earnings 6,178,567 (1,101,350) 5,077,217
Basic earnings per share 0.37 0.30
Fully diluted earnings per share 0.36 0.30
--------------------------------------------------------------------
3. Share capital:
a. The issued share capital of the Company is as follows:
--------------------------------------------------------------------
--------------------------------------------------------------------
Common Amount
--------------------------------------------------------------------
(Restated - Note 2)
Balance at December 31, 2003 17,145,789 $ 28,397,470
Issued during the six months
ended June 30, 2004 for:
Exercise of options for cash 199,550 1,816,515
Stock-based compensation related
to exercise of options 281,747
Shares issued for private
placement 1,000,000 26,000,000
--------------------------------------------------------------------
18,345,339 56,495,732
Share issuance cost (1,401,096)
Future income tax recovery 469,315
--------------------------------------------------------------------
Balance at June 30, 2004 18,345,339 $ 55,563,951
--------------------------------------------------------------------
--------------------------------------------------------------------
b. Stock option activity for the
six months ended June 30,
2004 is as follows:
--------------------------------------------------------------------
--------------------------------------------------------------------
Shares
--------------------------------------------------------------------
Outstanding, December 31, 2003 1,120,602
Exercised (199,550)
--------------------------------------------------------------------
Outstanding, June 30, 2004 921,052
--------------------------------------------------------------------
--------------------------------------------------------------------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion