Conor Pacific Announces Second Quarter 1999 Results.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. , British Columbia--(BUSINESS WIRE)--Aug. 27, 1999-- (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. .) Conor Conor is an Irish male first name that may have been derived either from the Irish name Conchubhair. The name "Conchobhar" literally translates as "Consciousness like a Barr (top of a hill or a hill fort) (in modern spelling Conchúr or Cnochúr Pacific Environmental Technologies Inc. (Conor Pacific) today announced its financial results for the second quarter and six-month period ending June June: see month. 30, 1999. -0-
Three Months ended June 30 Six Months ended June 30
1999 1998 1999 1998
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Revenue $6,999,439 $7,972,437 $16,124,007 $14,986,417
Gross
Profit 3,258,701 3,253,634 6,945,217 6,210,775
Expense
(overhead) 2,561,688 2,833,790 6,028,575 5,206,711
Net Income
(loss) 200,905 75,587 (199,116) 380,034
EBITDA 697,073 419,844 916,642 1,004,064
Cash Flow
From
Operations 1,072,024 432,823 1,430,252 (498,346)
Total Assets 47,009,909 44,389,295
Net Debt 11,057,109 8,693,796
Shareholders
Equity 27,961,152 26,640,488
Revenue for the three month period ended June 30, 1999 declined due primarily to the closure of a subsidiary, Water Technology International, however, environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, and technology revenue increased to make up part of the difference. The acquisition of Integrated Environmental Sciences (IES) in Saskatchewan Saskatchewan, province, Canada Saskatchewan (səskăch`əwən, –wän', săs'–), province (2001 pop. 978,933), 251,700 sq mi (651,903 sq km), W Canada. and Precision Sampling (Precision) and Einarson, Fowler & Watson (EFW EfW Energy From Waste EFW Estimated Fetal Weight EFW Emergency Feedwater EFW Electric Fusion Welded (pipe) EFW Electric Field and Wave Experiment (Cluster spacecraft) ) in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). contributed to making up this difference. We are pleased to report that the initiatives to strengthen the organization and to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. costs and overheads have begun to take hold as follows: -0-
- Gross Profit margins improved from 40 percent in the first
quarter of 1999 to 47 percent in the second quarter of 1999 up
from 41 percent for the six month period ended June 30, 1998
- EBITDA increased 66 percent for the three months ended June 30,
1999 from the same period in 1998
- Net Income more than doubled in the quarter ended June 30, 1999
as compared to the same quarter in 1998
- Expense related to overheads declined 25 percent to $2,561,688 in
the second quarter of 1999 from $3,420,546 reported in the first
quarter of 1999
During the second quarter of 1999, Conor Pacific completed the acquisition of Urbanex Development Corporation, a real estate advisory and leasing firm operating 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. and completed the payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. of acquisition debt associated with the EFW and Precision acquisitions. Urbanex was Conor Pacific's partner in the start-up Start-up The earliest stage of a new business venture. of its brownfield See greenfield. property development initiatives. Investments for the six month period ended June 30, 1999 were as follows: -0- Business acquisitions and brownfield developments: $1,096,980 Technology and equipment (including capitalized interest of $545,000) $1,046,947 Interest on long-term debts, net $102,182 Principal repayments $361,770 Investments were funded $1,430,252 from cash flow and the balance from an increase in long term debt. Outlook: In June 1999, Conor Pacific announced that it reached agreement to acquire Risk Management Research Institute (RMRI RMRI Risk Management Research Institute ) in Manchester Manchester, city, England Manchester (măn`chəstər, –chĕs'tər), city and metropolitan district (1991 pop. 397,400), NW England, on the Irwell, Medlock, Irk, and Tib rivers. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. . RMRI has developed proprietary software products known as Risk Based Decision Management which has been used on a variety of Conor Pacific projects. This software when coupled with Conor Pacific's existing services and technologies extends Conor Pacific's ability to advise corporations in the better deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. and utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of environmental assets and will improve Conor Pacific's margins in this area of work. With the RMRI acquisition in hand, the Urbanex, EFW and Precision acquisition debt paid out and operations having been streamlined, Conor Pacific expects to begin to generate positive cash. In addition, the closing of a $2.5 million two year term loan with Royal Bank Capital Corporation will reduce the operating line and materially improve Conor Pacific's cash and working capital position. Conor Pacific has announced the engagement of Scotia Scotia (skō`shə), originally the Latin name for Ireland. In the Middle Ages, it was used to refer to Scotland, to which the Scots had migrated from Ireland. Today it is used poetically. Capital Markets to raise $20 million for its brownfield property development subsidiary. The proceeds of this financing will be used to finance brownfield property development opportunities. The announcement of the term debt facilities for each of the two existing brownfield development projects ensures that these projects will be able to be completed. Conor Pacific is anticipating income from these projects in 1999. Conor Pacific has begun hiring additional technical staff to handle an increased volume of work and to add new clients. Products sales continue with orders in hand. Management is now focused on profitably growing our core businesses. Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 The Company's Y2K plan continues on schedule with all identified issues being addressed. The Company is not aware of any Y2K issues that will not be resolved by November November: see month. 30, 1999 and we anticipate posting our Y2K compliance statement by this date. Conor Pacific is one of Canada's leading environmental services and technology firms, providing its customers with complete environmental solutions. With over 25 proprietary technologies, and offices in 11 locations in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and 2 locations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the Company is a leader in the assessment, remediation and development 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. real estate, water and wastewater Wastewater is any water that has been adversely affected in quality by anthropogenic influence. It comprises liquid waste discharged by domestic residences, commercial properties, industry, and/or agriculture and can encompass a wide range of potential contaminants and treatment, and air quality and environmental risk assessment. -0-
CONOR PACIFIC ENVIRONMENTAL
TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND 1998"
(Unaudited)
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1999 1998
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ASSETS
-----------------------------------------------------------------
CURRENT ASSETS:
Cash $223,042 $5,437,974
Accounts receivable 8,898,063 5,717,634
Unbilled services 1,156,871 3,963,868
Investment tax
credits receivable 2,155,269 2,622,078
Inventories 337,436 134,281
Prepaid expenses 473,765 564,429
Brownfield property
development 2,705,427 -
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15,949,873 18,440,264
TECHNOLOGY 9,892,353 12,844,906
MACHINERY AND EQUIPMENT 16,284,345 8,582,813
OTHER ASSETS 4,883,338 4,521,312
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$47,009,909 $44,389,295
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-----------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank indebtedness $4,877,054 $2,570,000
Accounts payable and
accrued liabilities 4,263,159 5,467,146
Current portion of
long-term debts 1,578,930 1,632,018
Unearned revenue 263,120 331,946
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10,982,263 10,001,110
Acquisition costs payable 380,513 1,148,028
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11,362,776 11,149,138
LONG-TERM DEBTS AND
OBLIGATIONS 6,180,055 6,123,796
OTHER LIABILITIES
AND DEFERRED CREDITS 1,505,926 475,873
-----------------------------------------------------------------
19,048,757 17,748,807
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SHAREHOLDERS' EQUITY:
Common Shares (Issued and
outstanding 1999 - 53,873,222;
1998 - 51,337,177) 18,436,309 16,488,429
Convertible debentures,
net of issue costs 8,113,396 8,038,576
Contributed surplus 718,273 718,273
Retained earnings 503,295 1,149,495
Cumulative foreign currency
translation adjustments 189,879 245,715
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27,961,152 26,640,488
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$47,009,909 $44,389,295
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CONOR PACIFIC ENVIRONMENTAL
TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF
INCOME AND RETAINED EARNINGS
(Unaudited)
-----------------------------------------------------------------
Three Months Six Months
Ended June 30 Ended June 30
-----------------------------------------------------------------
1999 1998 1999 1998
-----------------------------------------------------------------
REVENUE $6,999,439 $7,972,437 $16,124,007 $14,986,417
DIRECT COSTS 3,740,678 4,718,803 9,178,790 8,775,642
-----------------------------------------------------------------
Gross profit 3,258,761 3,253,634 6,945,217 6,210,775
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EXPENSES
Non-billable
professional
salaries 673,882 603,351 1,417,159 1,518,369
Administrative
salaries, wages
and benefits 871,508 1,050,627 1,946,328 1,557,556
General,
administrative
and selling 1,016,298 1,179,812 2,665,088 2,130,786
-----------------------------------------------------------------
2,561,688 2,833,790 6,028,575 5,206,711
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EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION,
AMORTIZATION AND
UNUSUAL ITEMS 697,073 419,844 916,642 1,004,064
Interest and
bank charges 94,851 79,246 102,182 148,723
Depreciation and
amortization 354,200 245,511 677,959 443,807
Gain on sale
of investment (219,669) - (219,669) -
Restructuring
costs 215,451 - 480,451 -
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-----------------------------------------------------------------
INCOME BEFORE
TAXES 252,240 95,087 (124,281) 411,534
Income tax
expense 51,335 16,500 74,835 31,500
-----------------------------------------------------------------
NET INCOME (LOSS) 200,905 78,587 (199,116) 380,034
RETAINED EARNINGS,
beginning
of period 321,414 1,089,089 740,245 787,642
EQUITY ACCRETION (19,024) (18,181) (37,834) (18,181)
-----------------------------------------------------------------
RETAINED EARNINGS,
end of period $503,295 $1,149,495 $503,295 $1,149,495
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-----------------------------------------------------------------
-----------------------------------------------------------------
BASIC EARNINGS
(LOSS) PER SHARE $0.00 $0.00 $0.00 $0.01
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CONOR PACIFIC ENVIRONMENTAL
TECHNOLOGIES INC.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
-----------------------------------------------------------------
Three Months Six Months
Ended June 30 Ended June 30
-----------------------------------------------------------------
1999 1998 1999 1998
-----------------------------------------------------------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Cash receipts from
customers $6,681,942 $9,439,313 $16,624,504 $15,948,278
Cash paid to
suppliers and
employees
Direct operating
and administrative
expenses (4,136,368) (7,984,776) (12,309,759) (13,929,023)
Non-billable
professional
salaries (478,792) (603,351) (1,417,159) (1,518,369)
Head office
general and
administrative
expenses (802,818) (339,117) (1,264,817) (850,509)
-----------------------------------------------------------------
Operating
cash flow 1,263,964 512,069 1,632,769 (349,623)
Interest and
bank charges (346,605) (269,246) (647,182) (488,723)
Interest
capitalized to
technologies 255,000 190,000 545,000 340,000
Income tax
payments (100,335) - (100,335) -
-----------------------------------------------------------------
1,072,024 432,823 1,430,252 (498,346)
-----------------------------------------------------------------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Acquisitions, net of
cash received (691,242) (819,362) (691,242) (819,362)
Technology
development
expenditures (336,017) (327,826) (862,070) (791,506)
Additions of
machinery
and equipment (128,520) (300,255) (184,877) (354,539)
Other asset
additions, net (102,605) 23,214 (156,308) (37,002)
Brownfield property
expenditures (152,105) - (405,738) -
Proceeds from
sale of
technology - 232,222 - 232,222
-----------------------------------------------------------------
(1,410,489) (1,192,007) (2,300,235) (1,770,187)
-----------------------------------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Increase (decrease)
in long-term
debts, net (129,288) (254,969) 628,230 (1,011,914)
Increase (decrease)
in acquisition
costs
payable (1,782,968) 5,499 (2,599,673) (925,872)
Increase (decrease)
in other
liabilities (1,517) - 10,520 (362,500)
Issuance of
common shares 148,259 186,831 194,637 186,831
Increase in
deferred credit 75,498 - 75,498 -
Issuance of
convertible
debentures - - - 11,300,000
Redemption of
preferred shares - - - (2,059,080)
-----------------------------------------------------------------
(1,690,016) (62,639) (1,690,788) 7,127,465
-----------------------------------------------------------------
NET INCREASE
(DECREASE)
IN CASH (2,028,481) (821,823) (2,560,771) 4,858,932
CASH POSITION,
BEGINNING
OF PERIOD (2,625,531) 3,689,797 (2,093,241) (1,990,958)
-----------------------------------------------------------------
CASH POSITION,
END OF
PERIOD $(4,654,012) $2,867,974 $(4,654,012) $2,867,974
-----------------------------------------------------------------
-----------------------------------------------------------------
Cash position
represented by:
Cash $223,042 $5,437,974 $223,042 $5,437,974
Bank indebtedness
(4,877,054) (2,570,000) (4,877,054) (2,570,000)
-----------------------------------------------------------------
$(4,654,012) $2,867,974 $(4,654,012) $2,867,974
-----------------------------------------------------------------
-----------------------------------------------------------------
CONOR PACIFIC ENVIRONMENTAL TECHNOLOGIES INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-----------------------------------------------------------------
Operating Segment - Six Months Ended June 30, 1999
Risk
Environmental Assessment Water &
Environmental Products & & Asset Wastewater
Services Technologies Mgmt. Treatment
-----------------------------------------------------------------
Revenue -
external 9,431,320 1,305,661 1,302,222 78,470
Intersegment
revenue 88,889 - - -
Revenue 9,520,209 1,305,661 1,302,222 78,470
Net income 1,099,585 157,930 51,744 -
Capital
Expenditures 72,205 862,070 67 -
Total assets 9,870,579 21,415,647 736,101 30,948
Depreciation &
Amortization 253,067 - 1,321 -
Operating Segment - Six Months Ended June 30, 1998
Risk
Environmental Assessment Water &
Environmental Products & & Asset Wastewater
Services Technologies Mgmt. Treatment
-----------------------------------------------------------------
Revenue -
External 7,006,153 24,949 769,683 53,000
Intersegment
Revenue 388,469 - - -
Revenue 7,394,622 24,949 769,683 53,000
Net income 1,115,944 172,222 16,720 -
Capital
Expenditures 16,698 821,506 498 -
Total assets 6,957,215 18,734,323 556,952 17,425
Depreciation &
amortization 127,476 - 1,322 -
Operating Segment - Six Months Ended June 30, 1999
Remediation &
Brownfield Packaged
Property Gas
Devel. Distribution Total
---------------------------------------------------------------
Revenue - external 3,331,699 674,635 16,124,007
Intersegment
revenue 551,636 - 640,525
Revenue 3,883,335 674,635 16,764,532
Net income 137,688 211,783 1,658,730
Capital
expenditures 411,877 103,731 1,449,950
Total assets 6,500,098 2,564,439 41,117,812
Depreciation &
amortization 121,204 56,519 432,111
Operating Segment - Six Months Ended June 30, 1998
Remediation &
Brownfield Packaged
Property Gas
Devel. Distribution Total
---------------------------------------------------------------
Revenue -
external 6,478,121 654,511 14,986,417
Intersegment
revenue - - 388,469
Revenue 6,478,121 654,511 15,374,886
Net income 156,925 196,816 1,658,627
Capital
expenditures 37,841 29,331 905,874
Total assets 6,143,535 2,426,084 34,835,534
Depreciation &
amortization 100,478 50,243 279,519
Reconciliation of Segment Totals to Financial Statements
------------------------------------------------------------
Reconciliation of
Segment Net Income 1999 1998
-----------------------------------------------------------
Segment net income 1,658,730 1,658,627
Centrally incurred
expenses (1,056,712) (1,082,805)
Restructuring costs (480,451) -
Centrally incurred
depreciation & amortization (245,848) (164,288)
Centrally incurred
income tax expense (74,835) (31,500)
-----------------------------------------------------------
Net Income (Loss) (199,116) 380,034
-----------------------------------------------------------
Reconciliation of
Segment Assets to
Total Assets 1999 1998
-----------------------------------------------------------
Segment assets 41,117,812 34,835,534
Central assets 5,892,097 9,553,761
-----------------------------------------------------------
Total assets 47,009,909 44,389,295
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