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Bovar Reports 1996 Results.

CALGARY, ALBERTA--(BUSINESS WIRE)--Feb. 27, 1997--Bovar (TSE: BVR.) BOVAR Inc. reported that revenues increased 13.7 percent to $106.7 million in 1996 from $93.8 million in 1995.

Net income for the year ended December 31, 1996 was $4.9 million ($0.06 per share) compared to $10.8 million ($0.13 per share) for the year ended December 31, 1995. As previously announced, during the fourth quarter of 1996 a loss of $3.6 million was recognized on the write-down of assets associated with BOVAR's biomedical facility. During the third quarter of 1995, other income of $4.3 million was recognized relating to an agreement reached with the Province of Alberta. Excluding these two unusual events, net income for 1996 was $8.5 million compared to $6.6 million for 1995.

Revenues for the fourth quarter were $35.3 million compared to $24.8 million in the fourth quarter of 1995. Net loss for the fourth quarter was $0.5 million, after the $3.6 million write down, compared to net income of $2.0 million in the comparable quarter of 1995.

Cash flow from operations for the year decreased to $12.4 million from $24.7 million in 1995. Cash at December 31, 1996 was $49.2 million compared to $17.9 million at December 31, 1995.

Revenues of the Waste Management segment increased 10.9 percent to $61.8 million in 1996 from $55.8 million in 1995. The Waste Management segment principally consists of the operation of the Swan Hills Treatment Centre ("Treatment Centre").

Revenues of the Treatment Centre were as follows: -0-


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(millions) 1996 1995
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Alberta generated waste $ 8.4 $13.3

Extra-provincial generated waste 26.6 9.3

Amortization of deferred revenues 12.3 -

Subsidy for operating deficiency 4.6 14.1

Guaranteed rate of return 7.7 17.4
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 $59.6 $54.1
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Direct and indirect operating expenses of the Waste Management segment increased 27.5 percent to $30.9 million from $24.2 million in 1995 and as a percentage of revenues increased from 43.4 percent to 49.9 percent in 1996. The increase in expense levels principally reflects BOVAR's increased ownership in the Treatment Centre. The decline in profitability reflects decreased revenues associated with the operating deficiency subsidies and the guaranteed rate of return payments received from the Province.

Excluding revenues associated with operating deficiencies and guaranteed rates of return, operating expenses of the Treatment Centre, as a percentage of waste treatment revenues received from customers, improved 16.2 percent over 1995 as a result of improved operating efficiencies and the processing of higher margin waste streams.

Revenues of $25.2 million for the Engineered Products segment remained consistent with levels achieved in 1995. New products and non-North American markets accounted for a larger portion of revenues in 1996. Direct and indirect operating expenses of the Engineered Products segment declined 6.2 percent to $16.4 million from $17.4 million in 1995 and as a percentage of revenues declined from 68.6 percent to 65.0 percent in 1996. During the year, $1.0 million of profit from the sale of air quality monitoring equipment for Malaysia, deferred from 1995, was recognized.

Revenues of the Environmental Services segment increased 54.9 percent to $19.6 million from $12.7 million in 1995. Of this increase, $6.0 million relates to reimbursable subcontracted costs associated with remediation projects in which BOVAR acts as project manager. Direct and indirect operating expenses of the Environmental Services segment increased 44.0 percent to $17.6 million from $12.2 million in 1995 and as a percentage of revenues decreased from 96.5 percent to 89.5 percent in 1996. Margins recognized on the reimbursable subcontracted costs and improved utilization rates account for the improvement.

Administrative and selling expenses increased 12.5 percent to $13.8 million from $12.2 million in 1995. Depreciation and amortization expense increased 19.5 percent to $16.1 million from $13.5 million in 1995 reflecting the write off of equipment at the Treatment Centre. This charge was offset by additional amortization of deferred revenues. Net financing expense decreased 82.9 percent to $1.0 million from $5.8 million in 1995.

Although cash flow from operations decreased as a result of the privatization of the Treatment Centre, the cash BOVAR received upon its acquisition allowed BOVAR to repay all of its long term debt and improve its cash position significantly. BOVAR has adequate capital resources to meet its operating and capital expenditure requirements and is well positioned to pursue investment opportunities.

BOVAR Inc., which is listed on The Toronto Stock Exchange under the symbol BVR, is one of Canada's leading international providers of environmental and waste management products and services. BOVAR owns and operates Canada's only fully integrated hazardous waste treatment facility which is located near Swan Hills, Alberta. BOVAR conducts its environmental operations through BOVAR Waste Management, BOVAR Western Research and BOVAR Environmental.

CONTACT: Bovar Inc.

Monty L. Davis, 403/235-8302-8300

bovarinc@bovar.com

or

Bovar Inc.

Daryl W. Ferko, 403/235-8329
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Publication:Business Wire
Date:Feb 27, 1997
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