Bennett Environmental Announces Third Quarter 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) today announced its financial and operating results for the quarter and nine months ended September September: see month. 30, 2004 and reported on other developments. --Net loss of $0.43 per share including an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $0.36 per share in the third quarter --Submission of a study commissioned by the Company to the 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. Ministry of Environment which concludes that the Company is not the source of elevated levels of dioxins and furans near the RSI (Repetitive Strain Injury) Ailments of the hands, neck, back and eyes due to computer use. The remedy for RSI is frequent breaks which should include stretching or yoga postures. plant. --Six week plant closure is scheduled for RSI, beginning in mid November November: see month. --New orders received totalling a minimum of 11,000 tonnes of soil for thermal remediation Financial results The Company announced a third quarter after-tax loss of $7.8 million ($0.43 per common share). Bennett earned $6.8 million or $0.39 per share in the same quarter last year. In the third quarter, Bennett took pre-tax charges totalling approximately $10.0 million. These charges include: --Non-cash charges of $8 million related to (i) write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , (ii) write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs related to operating permits for a proposed waste disposal facility at Kirkland Lake, Ontario Kirkland Lake is a town located in Timiskaming District in northeastern Ontario, Canada. The 2006 population, according to Statistics Canada, was 8,248. The lake nearby was named after Winnifred Kirkland, a secretary of the Ontario Department of Mines in Toronto. which will not be built and (iii) write-down of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and the taking of a provision against a cost reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. claim with respect to the recently completed Saglek project. --A charge of approximately $2.0 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc staff reductions and closure costs for the Vancouver office. During the third quarter of 2004, Bennett processed approximately 20,000 tonnes of soil at its RSI plant in Saint Ambroise, Quebec. Revenue for the quarter was $7.9 million compared to $22.4 million in the third quarter of 2003 when 23,000 tonnes of soil were processed. Factors affecting the quarter's revenue are described below. Saglek The Saglek project consisted of work in northern Labrador for Defense Construction Canada with respect to tendered and non-tendered specifications. The project started in 2002 and was completed in the third quarter of 2004. Revenue for this project was recognized using the "percentage of completion method" of accounting under which a formula is applied to recognize revenue based on the rate at which costs are actually incurred in the completion of the project. This method of accounting was adopted because in the Saglek project Bennett was the prime contractor responsible for project construction and supervision which went beyond its normal role of shipping and thermally treating 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. soil. Saglek was the only project for which the Company used the "percentage of completion" method for revenue recognition in 2003 and the first three quarters of 2004. During the third quarter, the Saglek project was completed and approximately 7,000 tonnes of material from Saglek were processed. Over the course of the entire project, Bennett excavated approximately 56,000 tonnes of soil and processed approximately 44,000 tonnes of material in its facilities. The volume of material processed was approximately 4,600 tonnes less than originally estimated for 2004 because the project ended sooner than expected. Bennett has submitted a claim for extra expenses for the removal of certain materials that were a part of a non-tendered specification. The Company is endeavouring to recover these costs but a provision has been recorded as there is no assurance that the Company will be successful in recovering all costs. The provision against the claims and the shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. is treated as a change in the recorded total revenue attributable to the project, and accordingly, revenues in the quarter were $8 million lower than expected. Other Projects Bennett processed a total of 13,000 tonnes of soil from other projects in Canada and the US. Revenue from processed materials from these other projects averaged approximately $600 per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. . Costs and Expenses The Company's operating costs operating costs npl → gastos mpl operacionales were $9.6 million for the third quarter, approximately equal to the costs for the same period last year. Included in the operating costs were costs related to the mobilization mobilization Organization of a nation's armed forces for active military service in time of war or other national emergency. It includes recruiting and training, building military bases and training camps, and procuring and distributing weapons, ammunition, uniforms, and de-mobilization of equipment for the Saglek contract of $2.1 million. Administrative and business development costs were $5.4 million for the quarter compared to $1.6 million from the same period last year. The additional expenses include a $2.0 million provision related to the closure costs related to the Vancouver office, and to higher legal costs. Amortization expenses were $0.6 million, approximately equal to those of the prior period. In the quarter the Company recorded a $4.3 million charge as a result of an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. in assets values related to the Kirkland Lake Kirkland Lake, mining town, E Ont., Canada. An important gold-mining center, gold was discovered there in 1911 and again in the 1980s at Harker. The mining of iron ore and tourism are two other important industries. operating permits and that project's fixed assets. Balance Sheet At September 30, 2004, cash on hand was $5.6 million compared to $13.9 million in the second quarter of 2004. The major use of cash in the quarter was on the completion of the Belledune plant. Working capital at the end of the quarter, net of cash, was $20.6 million compared to $18.4 million a year earlier. At the end of the third quarter, long term debt was $303,000. Credit Facility Subsequent to the end of the quarter, the Company was notified of the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance by one of its lenders of a $10 million line of credit which was completely undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely . Nine Months Results For the nine months ended September 30, 2004 Bennett's net loss, after the charges described above, was $10.2 million ($0.56 per common share) on revenues of $20.8 million. For the period ending September 30, 2003, Bennett earned $11.8 million or $0.71 per share on revenues of $47.8 million. Recupere Sol Sol, in Roman religion Sol (sŏl), in Roman religion, sun god. An ancient god of Mesopotamian origin, he was introduced (c.220) into Roman religion as Sol Invictus by emperor Heliogabalus. Plant (RSI) in Saint-Ambroise. As previously announced, the Quebec Ministry of Environment's Prior Notice has alleged that Bennett was the source of elevated levels of dioxins and furans in the vicinity of the plant in Saint Ambroise, Quebec. On November 1, 2004 Bennett submitted a comprehensive study to the Quebec Ministry of Environment, which has concluded that the "finger prints" of the dioxins and furans emanating from Bennett's plant do not match the "finger prints" of dioxins and furans from the Ministry's report. Bennett's study further demonstrates that its plant emissions remain well within regulated limits. The results of the study suggest that there are other probable sources for the elevated levels. The study is currently being reviewed by officials of the Quebec Ministry of the Environment. Expected Volume of Soils to be Treated and Temporary Plant 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 At the end of the third quarter, Bennett's soil inventory was about 8,000 tonnes. The Company has received new orders to process a minimum of 11,000 tonnes of contaminated soil from sites in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. . Bennett anticipates that the soil will be processed during the first and second quarters of 2005. Bennett expects to process approximately 8,000 to 10,000 tonnes in the fourth quarter, prior to shutting the RSI plant down in mid-November through to year end. It is anticipated that this temporary shut-down will produce an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in the fourth quarter. In the first and second quarters of 2005, the RSI plant is expected to operate at about 60-80% of capacity. Comment "Over the past two quarters we have taken a series of very important steps designed to position Bennett for recovery. We have put new and experienced sales capability in the US market, added depth to our management team and implemented new processes to track and identify new business," said Al Bulckaert, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "In the past the Company has relied heavily on 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 Manville New Jersey. While the Federal Creosote Project is important both to us and to the US Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and , it is only one of many sites 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. containing contaminated soil which can be treated using Bennett's thermal oxidization technology," continued Al Bulckaert. "During Q3 Bennett submitted bids on over 50,000 tonnes of contaminated soil at these sites." "These bidding processes are time consuming so we don't anticipate a dramatic impact on our near term volumes. But as these latest orders demonstrate, our enhanced sales presence, backed by our solid customer relationships, should increase the flow of material to our plants and provide significantly improved results in 2005. Bennett has the resources and the proven ability to be a leader in the environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a industry," concluded Mr. Bulckaert. About Bennett Environmental Inc. Bennett Environmental Inc. is a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. 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 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. 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. (Trading Symbol Trading symbol See: Ticker symbol "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. (Trading Symbol "BEL"). Note for Investors: 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 harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 September 30, 2004 with comparative figures
As at December 31, 2003
--------------------------------------------------------------------
September 30 December 31
2004 2003
--------------------------------------------------------------------
(unaudited) (Audited)
(Restated -
Note 2)
Assets
Current assets
Cash and cash equivalents $ 5,607,124 $ 12,586,353
Accounts receivable 21,946,826 29,012,175
Income tax receivable 3,569,375 -
Work-in-progress - 151,893
Prepaid expenses and other 2,805,814 2,154,983
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33,929,139 43,905,404
Investment 487,380 568,193
Note Receivable 300,000 -
Property, Plant and Equipment 45,208,290 23,779,384
Other assets 4,213,640 6,777,953
Goodwill 646,638 646,638
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$ 84,785,087 $ 75,677,572
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Liabilities and Shareholders'
Equity
Current liabilities
Accounts payable and accrued
liabilities $ 7,566,572 $ 9,964,937
Income taxes payable - 2,961,632
Current portion of long-term
debt 9,067 4,601
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7,575,639 12,931,170
Future income tax liability 692,194 2,616,861
Deferred revenue - 814,409
Long-term debt 300,767 417,143
Shareholders' equity
Share capital 55,790,712 28,397,470
(Common shares outstanding
18,415,940 (2003 -
17,145,789))
Contributed surplus 1,409,977 1,201,776
Retained Earnings 19,015,798 29,298,743
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76,216,487 58,897,989
$ 84,785,087 $ 75,677,572
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BENNETT ENVIRONMENTAL INC.
Consolidated Statement of Operations and Retained Earnings (Deficit)
(Expressed in Canadian dollars)
For the Nine-Month Period Ended September 30, 2004 with comparative
figures for the Nine-Month Period Ended September 30, 2003, and
the Three-Month Period Ended September 30, 2004 with the comparative
figures for the Three-Month Period Ended September 30, 2003
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9 months 3 months
September September September September
30, 30, 30, 30,
2004 2003 2004 2003
--------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
(Restated - (Restated -
Note 2) Note 2)
Sales $ 20,804,810 $ 47,822,472 $ 7,967,983 $ 22,402,772
Interest and
other income 438,468 543,346 188,391 209,515
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21,243,278 48,365,818 8,156,374 22,612,287
Expenses
Operating
costs 18,929,455 21,644,419 9,619,609 9,966,464
Administration
and business
development 11,251,426 6,251,145 5,422,654 1,669,208
Amortization 1,916,935 1,513,039 635,211 665,830
Loss from
assets
impairment 4,343,979 4,343,979
Foreign exchange 37,177 423,560 112,317 (57,759)
Interest expenses 71,978 86,285 23,677 35,364
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36,550,950 29,918,448 20,157,447 12,279,107
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Earnings (loss)
before income
taxes (15,307,672) 18,447,370 (12,001,073) 10,333,180
Income tax expense
Current (3,569,375) 6,290,563 (2,309,079) 3,303,590
Future (1,455,352) 305,000 (1,894,312) 255,000
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(5,024,727) 6,595,563 (4,203,391) 3,558,590
Net earnings
(loss) (10,282,945) 11,851,807 (7,797,682) 6,774,590
Retained Earnings
(Deficit),
beginning of
period 29,298,743 11,125,284 26,813,480 16,202,501
Retained
Earnings, end
of period $ 19,015,798 $ 22,977,091 $ 19,015,798 $ 22,977,091
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Basic earning
(loss) per
share $ (0.56) $ 0.71 $ (0.43) $ 0.40
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--------------------------------------------------------------------
Fully diluted
earnings (loss)
per share $ (0.56) $ 0.70 $ (0.43) $ 0.39
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Consolidated Statement of Cash Flows
(Expressed in Canadian dollars)
For the Nine-Month Period Ended September 30, 2004 with comparative
figures for the Nine-Month Period Ended September 30, 2003, and
the Three-Month Period Ended September 30, 2004 with the comparative
figures for the Three-Month Period Ended September 30, 2003
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9 months 3 months
September September September September
30, 30, 30, 30,
2004 2003 2004 2003
--------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
(Restated - (Restated -
Note 2) Note 2)
CASH PROVIDED BY
(USED IN):
Operations
Net earnings
(loss) $(10,282,945) $ 11,851,807 $ (7,797,682) $ 6,774,590
Items not
involving
cash:
Amortization 1,916,935 1,513,039 635,211 665,830
Equity
investment
loss 128,193 - 61,593 -
Write down of
investment (47,380) (47,380)
Stock-based
compensation 489,948 1,123,376 151,830 22,026
Shares issued
for services
rendered - 2,840 - -
Kirkland Lake
assets and
permits 4,343,979 - 4,343,979 -
Future income
taxes (1,455,352) 305,000 (1,894,312) 255,000
Changes in
operating working
capital:
Deferred
revenue (814,409) - - -
Accounts
receivable 7,065,349 (13,986,668) 901,242 (10,328,977)
Income Taxes
receivable (3,569,375) - (2,333,787) -
Work-
in-progress 151,893 37,530 37,973 (105,822)
Prepaid
expenses and
other (650,831) (349,968) 339,925 913,672
Note
Receivable (300,000) - (300,000) -
in Accounts
payable and
accrued
liabilities (2,398,365) (936,984) 3,395,309 1,274,482
Income taxes
payable (2,961,632) (1,655,431) - 3,343,176
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(8,383,992) (2,095,459) (2,506,099) 2,813,977
Investments:
Investments - - -
Purchase of
capital
assets (23,982,053) (4,253,107) (5,661,662) (802,640)
Increase
in other
assets (1,143,454) (1,449,463) (389,410) (893,192)
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(25,125,507) (5,702,570) (6,051,072) (1,695,832)
Financing:
Repayments of
long-term
debt (111,910) (631,531) (2,951) (108,408)
Increase in
long-term debt - - - -
Share capital,
issued for
cash 26,642,180 1,634,365 226,762 957,525
Repurchase
of share
capital - - -
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26,530,270 1,002,834 223,811 849,117
Decrease in cash
and cash
equivalents (6,979,229) (6,795,195) (8,333,360) 1,967,262
Cash and cash
equivalents,
beginning of
period 12,586,353 19,267,639 13,940,484 10,505,182
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Cash and cash
equivalents,
end of
period $ 5,607,124 $ 12,472,444 $ 5,607,124 $ 12,472,444
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Supplementary
disclosure of cash
flow information:
Cash paid for:
Interest paid 57,293 23,582 27,175 5,861
Income taxes
paid 1,073,454 7,985,580 - -
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