CCR Technologies Ltd. Reports Fifth Consecutive Profitable Quarter.Business Editors CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--May 14, 2004 CCR 1. CCR - condition code register. 2. CCR - (Database) concurrency control and recovery. Technologies Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CRL CRL - Carnegie Representation Language. Carnegie Group, Inc. Frame language derived from SRL. Written in Common LISP. Used in the product Knowledge Craft. )(www.reclaim.com), a leading chemical purification purification, in religion, the ceremonial removal of what the religion deems unclean. The usual agents of purification are water (as in baptism), bodily alteration (as in circumcision), and fire. technology solutions and service provider today announced financial results for the quarter end March 31, 2004. For the three months ended March 31, 2004, the Corporation achieved its fifth consecutive profitable quarter. Revenue of $4.5 million for the quarter produced a net income of $477,000 compared to revenue of $2.8 million generating a net income of $553,000 for the same period 2003. 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. Bud Bell commented "Q-1, 2004 revenues were up 58.6% from the same period last year. However the Service Reclaiming
Mr. Bell further said "Aside from the previously mentioned design fees, the balance of the total expenses were lower in the comparable period as management continued to emphasize cost control. The business backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. for Service Reclaiming has strengthened since the beginning of the year and the outlook for Technology Licensing and Solutions is good. The revenue generated by New Paradigm New Paradigm In the investing world, a totally new way of doing things that has a huge effect on business. Notes: The word "paradigm" is defined as a pattern or model, and it has been used in science to refer to a theoretical framework. will increase as the new plant for PrimeWest Energy comes on line in the next few weeks." CCR Technologies is a technology solutions company focused on the purification of process chemicals and sweetening of sour gas Sour gas is natural gas or any other gas mixture which contains significant amounts of hydrogen sulfide (H2S). According to this reference [1], natural gas is usually considered sour if there are more than 5. through the use of proprietary patented technologies. The Company provides economic and environmental benefits to the upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger , downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). oil and gas industries, and is also pursuing new business opportunities in the petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. and international chemical purification markets. Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial Management's Discussion and Analysis (MD&A) should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the unaudited interim 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 for the three months ended March 31, 2004 (first quarter) and the audited consolidated financial statements and MD&A for the year ended December December: see month. 31, 2003. This MD&A is effective May 12, 2004. General The Corporation had revenue of $4,502,000 for the three months ended March 31, 2004 compared to $2,838,000 in the same period 2003. First quarter 2004 profits were $477,000 compared to $553,000 for 2003. The lower profit margins were attributed to sales product mix. First quarter 2004 had significant Technology Licensing and Solutions "TLS (1) (Transport Layer Security) A security protocol from the IETF that is based on the Secure Sockets Layer (SSL) 3.0 protocol developed by Netscape. TLS uses digital certificates to authenticate the user as well as authenticate the network (in a wireless " revenues compared to nil in first quarter 2003. TLS generally has larger volumes with lesser margin. Working Capital less term bank loan doubled during the quarter from $604,000 at December 31, 2003 to $1,294,000 attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher volumes associated with TLS activities. In quarter one 2004, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased $687,000 as result of $477,000 net income, $15,000 from share issuance related to stock options, and $194,000 favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. valuation fluctuation Fluctuation A price or interest rate change. between the 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. and U.S. dollar. Currency fluctuation variances are shown on the Balance Sheet as Cumulative Translation Adjustment and have periodic positive and negative effects on Shareholder's Equity. Asset translation valuation adjustments have no effect on the Corporation's income statement or on cash flow. Results of Operations Revenue Quarter one consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenues increased from $2,838,000 in 2003 to $4,502,000 in 2004. This large increase was the result of significant revenues in Technology Licensing and Solutions compared to nil in quarter one 2003, and a decrease in committed days from the prior year in chemical reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. services. Chemical reclamation activity was down from prior year as first quarter 2003 was very strong with as a result of a large project for a major oil company. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Direct operating expenses increased during first quarter 2004 by $1,921,000 over previous year first quarter as a result of a high costs associated with strong revenues coming from within the TLS product line. Indirect costs Indirect costs are costs that are not directly accountable to a particular function or product; these are fixed costs. Indirect costs include taxes, administration, personnel and security costs. See also
Interest Interest expenses declined as a result of a reduction in the level of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. being carried by the Company during the first quarter of 2004 as compared to the first quarter of 2003. The term bank note was reduced during the three months ended March 31, 2004 from $1,575,000 to $1,350,000 due to monthly principal note payments of $75,000. The bank loan dropped from $518,000 to $66,000 with paydown Paydown A payment made towards an outstanding loan balance. Notes: Every time you make a mortgage payment you are "paying down" your loan. See also: Loan, Mortgage, Principal paydown In a corporate or U.S. during the quarter of $452,000 from operations cash flows. Income taxes Income taxes reflect the income tax laws of the various jurisdictions in which the Corporation operates. The Corporation recognized a tax recovery during the quarter of $142,000. This reflects the benefit of certain prior year losses that have been recognized for accounting purposes in the first quarter of 2004, as it is more likely than not that they will be utilized. Liquidity and Capital Resources Cash and term deposits increased $800,000 during the quarter from $2,743,000 to $3,543,000. Operating activities contributed $1,410,000. These increases were offset by the $452,000, and $225,000 respective pay downs of the Bank Loan and Term Bank Loan, with the difference being largely attributable to changes in exchange rates on cash held in US dollars by the Company. Quarterly Financial Information The following information sets forth certain selected financial information for the Corporation on a quarterly basis. All amounts are expressed in thousands ($000) except per share amounts.
2002 2003 2004
------------------- --------------------------- -----
Jun Sep Dec Mar Jun Sep Dec Mar
30 30 31 31 30 30 31 31
------------------- --------------------------- -----
Revenue 1226 1006 892 2838 2475 4333 3366 4502
Net income
(loss) (813) (756) (566) 553 418 830 363 477
Income (loss)
per share:
- basic (.02) (.02) (.02) .02 .01 .02 .01 .01
Note:
1. There were no extraordinary items related to the financial
information displayed.
2. Income (loss) per share on a fully diluted basis has not been
provided as it is anti-dilutive.
Business Risks The demand for CCR's prime service is largely dependent upon the quantity and deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. rate of the chemicals used by its customers in refineries, gas plants and petrochemical plants. It is further limited by the Company's ability to induce in·duce v. 1. To bring about or stimulate the occurrence of something, such as labor. 2. To initiate or increase the production of an enzyme or other protein at the level of genetic transcription. 3. its customers to reclaim rather than replace 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. chemicals. The decision by a customer to reclaim is often dependent upon the economic value of the Company's services versus the alternatives. The Company currently mainly services the oil and gas sector and as a result is exposed to all of the risks of that sector, including but not limited to commodity price risk. Shares of CCR Technologies Ltd. trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol "CRL".
CCR Technologies Ltd.
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2004 2003
--------------------------------------------------------------------
Assets
Current
Cash and term deposits $ 3,542,536 $ 2,743,013
Accounts receivable
- Trade 1,497,712 1,230,066
- Work in progress 1,311,941 912,804
Prepaid expenses and deposits 742,787 391,030
---------------------------
7,094,976 5,276,913
Future tax asset 372,000 230,000
Property and equipment (Note 2) 6,182,994 6,325,043
Intangibles and Long-term
Deposit (Note 3) 285,717 288,595
---------------------------
---------------------------
$13,935,687 $12,120,551
---------------------------
Liabilities and Shareholders' Equity
Current liabilities
Bank Loan $ 66,000 $ 518,000
Accounts payable and accrued liabilities 2,895,532 1,863,143
Deferred revenue 1,484,516 716,334
Current portion of term bank loan 900,000 900,000
---------------------------
5,346,048 3,997,477
Term bank loan 450,000 675,000
---------------------------
5,796,048 4,672,477
---------------------------
Shareholders' equity
Share capital (Note 4) 9,764,189 9,749,189
Contributed surplus 20,000 20,000
Share purchase loan receivable (130,000) (130,000)
Deficit (236,171) (713,649)
Cumulative translation adjustment
(Note 5) (1,278,379) (1,477,466)
---------------------------
Total shareholders' equity 8,139,639 7,448,074
---------------------------
---------------------------
$13,935,687 $12,120,551
---------------------------
On behalf of the Board:
signed signed
Director Director
Elson J. McDougald Kent R. Anderson
The accompanying notes are an integral part of these consolidated
financial statements.
CCR Technologies Ltd.
Consolidated Statements of Operations and Deficit
(Unaudited)
For the three months ended March 31 2004 2003
--------------------------------------------------------------------
Revenue $ 4,502,138 $ 2,838,088
Operating expenses 3,050,065 1,128,652
---------------------------
Gross margin 1,452,073 1,709,436
Research costs, net of recoveries - 91,329
Selling and administrative costs 785,594 677,788
---------------------------
Earnings before interest,
taxes and amortization 666,479 940,319
Interest
Current 7,446 9,898
Long Term 27,380 45,874
---------------------------
Earnings before taxes and amortization 631,653 884,547
Amortization
Operating assets 281,427 300,381
Administrative and other assets 11,965 21,858
---------------------------
Income before the under noted 338,261 562,308
Interest income 1,388 581
Miscellaneous income - 387
Gain (loss) on foreign exchange (4,171) (10,414)
---------------------------
Income before income taxes 335,478 552,862
Income taxes (recovery)
Future (142,000) -
---------------------------
Net income for the period 477,478 552,862
--------------------------------------------------------------------
Deficit, beginning of period (713,649) (2,877,211)
Deficit, end of period $ (236,171) $(2,324,349)
Earnings per share - basic and diluted $ 0.01 $ 0.02
Weighted average number of shares
outstanding - basic 34,012,769 33,871,676
diluted 34,488,000 -
The accompanying notes are an integral part of these consolidated
financial statements.
CCR Technologies Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
--------------------------------------------------------------------
For the three months ended March 31 2004 2003
Cash flows from operating activities:
Net income for the year $ 477,478 $ 552,862
Add (deduct) items not affecting cash:
Amortization 293,392 322,239
Future income taxes (142,000) -
---------------------------
628,870 875,101
Increase (decrease) in working
capital items other than cash:
Accounts receivable (667,503) (1,732,306)
Prepaid expenses and deposits (351,757) (450,716)
Accounts payable and accrued liabilities 1,032,389 1,276,848
Deferred revenue 768,182 110,317
---------------------------
1,410,181 79,244
Cash flows from investing activities:
Purchase of property and equipment, net (11,847) -
Cash flows from financing activities:
Foreign exchange (1,250) -
Repayment of bank loans (452,000) -
Repayment of long term debt (225,000) (225,000)
Issuance of shares (net of issuance costs) 15,000 -
---------------------------
(663,250) (225,000)
Foreign exchange gain (loss)
on cash held in a foreign currency 64,439 (9,440)
--------------------------------------------------------------------
Increase (decrease) in cash and
term deposits 799,523 (155,196)
Cash and term deposits,
beginning of year 2,743,013 582,588
Cash and term deposits, end of period $ 3,542,536 $ 427,392
--------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
CCR Technologies Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
The Company uses patented technology and mobile processing equipment primarily for the purification and reclamation of amines amines (  mēnz´),n.pl organic compounds that contain nitrogen. and glycols in the refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , natural gas processing Natural gas processing plants, or fractionators, are used to purify the raw natural gas extracted from underground gas fields and brought up to the surface by gas wells. The processed natural gas, used as fuel by residential, commercial and industial consumers, is almost pure , petrochemicals manufacturing and offshore gas processing. The Company provides its services to major Canadian, US and International corporations. 1. Significant Accounting Polices The interim financial statements of CCR Technologies Ltd. (the 'Company") have been prepared by management 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 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 . The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. notes. Actual results could differ from those estimates. The consolidated financial statements have, in management's opinion, been properly prepared using careful judgment with reasonable limits of materiality MATERIALITY. That which is important; that which is not merely of form but of substance. 2. When a bill for discovery has been filed, for example, the defendant must answer every material fact which is charged in the bill, and the test in these cases seems to . These interim financial statements should be read in conjunction with the most recent annual financial statements. The significant accounting policies follow those set out in the most recently issued annual financial statements.
2. Property and Equipment
March 31, 2004
--------------------------------------------------------------------
Accumulated Net Book
Cost Amortization Value
---------------------------------------
Processing equipment $10,594,132 $4,931,559 $ 5,662,573
Automotive 365,602 263,981 101,621
Computer equipment 279,618 236,146 43,472
Equipment 509,203 133,875 375,328
---------------------------------------
$11,748,555 $5,565,561 $ 6,182,994
---------------------------------------
December 31, 2003
--------------------------------------------------------------------
Accumulated Net Book
Cost Amortization Value
---------------------------------------
Processing equipment $10,571,057 $4,777,872 $ 5,793,185
Automotive 369,800 263,981 105,819
Computer equipment 239,492 196,020 43,472
Equipment 516,442 133,875 382,567
---------------------------------------
$11,696,791 $ 5,371,748 $ 6,325,043
---------------------------------------
Included in processing equipment are costs of $339,064 (2003 - $332,750) that are not being amortized as the assets are being held as processing equipment components and spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. . Once the assets are available for use, these costs will be amortized. These assets have been provided as security for the Company's bank loans.
3. Intangibles and Long-term Deposit
March 31, 2004
--------------------------------------------------------------------
Accumulated
Amortization Net Book
Cost and write down Value
---------------------------------------
Technology development
and intellectual property $ 658,850 $ 610,160 $ 48,690
Patent rights 207,712 34,685 173,027
Goodwill 100,000 100,000 -
Reclamation Deposit 64,000 - 64,000
---------------------------------------
$1,030,562 $ 744,845 $ 285,717
---------------------------------------
December 31, 2003
--------------------------------------------------------------------
Accumulated
Amortization Net Book
Cost and write down Value
---------------------------------------
Technology development
and intellectual property $ 658,850 $ 607,655 $ 51,195
Patent rights 206,809 33,409 173,400
Goodwill 100,000 100,000 -
Reclamation Deposit 64,000 - 64,000
---------------------------------------
$ 1,029,659 $ 741,064 $ 288,595
---------------------------------------
4. Share Capital
Issued
------
March 31, 2004 December 31, 2003
----------------------------------------------------
Common Shares No of shares Value No. of shares Value
----------------------------------------------------
Balance,
beginning of
period 34,254,176 $ 9,749,189 33,871,676 $ 9,625,592
Issued for cash
on exercise of
options (1) 100,000 15,000 382,500 123,597
----------------------------------------------------
Balance,
end of period 34,354,176 $ 9,764,189 34,254,176 $ 9,749,189
----------------------------------------------------
(1) The above issuance of 100,000 shares related to options which
would have expired October, 2005.
No options were granted or expired during the period end March 31,
2004.
5. Cumulative Translation Adjustment
The net change in the cumulative translation account for the period
ended March 31 is comprised of:
2004 2003
-----------------------------
Cumulative translation gain,
beginning of period $ (1,477,466) $ 278,605
Property and equipment, net gain (loss) 137,114 (789)
Net working capital, net gain (loss) 61,973 (527)
-----------------------------
Cumulative translation gain (loss),
end of period $ (1,278,379) $ 277,289
-----------------------------
The accompanying notes are an integral part of these consolidated
financial statements.
Included in processing equipment are costs of $339,064 (2003 - $332,750) that are not being amortized as the assets are being held as processing equipment components and spare parts. Once the assets are available for use, these costs will be amortized. These assets have been provided as security for the Company's bank loans.
6. Segmented Information
(a) The Company's activities are conducted in two segments:
1. Reclaiming Services, sales and development, and Technology
Licensing and Solutions ("Chemical Reclaiming")
2. Bio Desulphurization Process Services in the natural gas
processing industry ("NGP).
The accounting policies of the segments are the same as those described in the summary of significant accounting policies (Note 2). The Company eliminates intersegment sales and transfers. The Company allocates its revenues between countries based on location that has title to the contract. Segment loss is measured as net loss after consideration of income taxes.
Chemical(1) Corporate & Consolidated
Description Reclaiming $ NGP $ Other $ $
--------------------------------------------------------------------
Three months ended
March 31, 2004
Sales to customers
outside enterprise 4,450,544 51,594 - 4,502,138
------------------------------------------------
Interest revenue 1,388 - - 1,388
------------------------------------------------
Amortization and
write down 291,302 754 1,336 293,392
------------------------------------------------
Interest expense 34,826 - - 34,826
------------------------------------------------
Segment profit (loss) 571,584 (92,410) (1,696) 477,478
------------------------------------------------
Capital expenditures 11,847 - - 11,847
------------------------------------------------
Segment assets 13,330,136 751,000 130,859 14,069,995
------------------------------------------------
Chemical Corporate & Consolidated
Description Reclaiming $ NGP $ Other $ $
--------------------------------------------------------------------
Three months ended
March 31, 2003
Sales to customers
outside enterprise 2,773,448 64,640 - 2,838,088
------------------------------------------------
Interest revenue 582 - - 582
------------------------------------------------
Amortization 320,710 - 1,529 322,239
------------------------------------------------
Interest expense 55,772 - - 55,772
------------------------------------------------
Segment profit (loss) 605,701 (43,148) (9,691) 552,862
------------------------------------------------
Capital expenditures - - - -
------------------------------------------------
Segment assets 13,355,186 71,452 94,782 13,521,420
------------------------------------------------
(1) As a result of a recent change to a licensing agreement, the
estimated earned revenue, calculated on the percentage completion
basis, increased by approximately $200,000 for the three months
ended March 31, 2004.
(b) The Company has operations in Canada and the United States.
Following is information by geographic areas:
Sales to Customers Property and equipment
and Intangibles
--------------------------------------------------------------------
Q1 2004 Q1 2003 Q1 2004 Q1 2003
-----------------------------------------------------
Canada $ 297,096 $ 968,509 $ 292,494 $ 346,843
US 4,205,042 1,869,579 6,176,217 8,498,462
-----------------------------------------------------
Total $ 4,502,138 $ 2,838,088 $ 6,468,711 $ 8,845,305
-----------------------------------------------------
-----------------------------------------------------
The US property and equipment are leased as required to the Canadian
segment.
7. Commitments The Company has committed to project engineering costs of US$1,974,000, of which, US$1,231,000 is included in accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. at December 31, 2003. 8. Related Party Transactions During the first quarter of 2004, the Company incurred the following related party expenses: - $9,306 in legal fees and related expenses to a law firm in which an officer is a partner. - $13,393 in legal fees to a law firm in which a director is a partner - $nil to a firm in which a director and former officer is President, for reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of expenses incurred. - $12,366 to a firm in which an officer is President for consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . All of the above fees were for professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. rendered in the normal course of operations. |
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