- Published: 12 January 2009
- Written by Editor
CV Technologies Announces Strong Return to Profitability and Double Digit Revenue Growth in Fiscal 2008
CV Technologies Inc. (TSX:CVQ) today announced that revenue for the fiscal year ended September 30, 2008 rose 17.5% to $49.4 million from $42.0 million in fiscal 2007. Net earnings increased to $4.6 million ($0.04 per common share) in fiscal 2008, a $14.4 million improvement from the fiscal 2007 net loss of $9.8 million ($0.09 loss per common share).
"CV Technologies achieved its growth and profitability goals for fiscal 2008, including its publicly stated objective of achieving a double digit sales increase," said Executive Chairman Jack Moffatt. "In fact, we have achieved our key goals in the 12 months since adopting our five-year strategic business plan that addresses all aspects of our business.
Among the initiatives that contributed to our success in fiscal 2008 were: rigorous focus on our customers; effective marketing programs; efficiencies in cost controls and cash management; and additions to our senior management and sales organization, that we believe will position us well for the future."
"Despite current global economic conditions we intend to build on the momentum established in fiscal 2008 by striving for another year of rising earnings and revenue growth in fiscal 2009," Mr. Moffatt said. "In our view our balance sheet and cash flow provide a solid foundation for pursuing our product development and marketing plans."
Cash flow prior to working capital changes was up $12.3 million year over year at $6.2 million. Cash, cash equivalents and short-term investments at September 30, 2008 rose sharply to $9.4 million from $2.7 million at the fiscal 2007 year-end, due to higher cash flow prior to working capital changes.
Fiscal 2008 United States revenue was $2.1 million, and United States expenditures were in line with this result. United States revenue in fiscal 2007 was $1.1 million. The Company will continue its current approach of directing its resources to the Canadian marketplace throughout fiscal 2009.
In the fourth quarter of fiscal 2008, revenue was up 68.1% at $14.0 million from $8.4 million in the comparable period last year. Net earnings rose to $0.5 million in the fourth quarter of fiscal 2008 from a net loss of $1.1 million in the fourth quarter of fiscal 2007.
Fiscal fourth quarter highlights included: continuing robust brand loyalty for COLD-FX(R), which remains Canada's best-selling cold and flu remedy; sales of COLD-FX Extra Strength, launched early in fiscal 2008, remained strong; and the opening of a Montreal office in July, which completed the development of CV Technologies' national sales team to pursue our goal of capitalizing on attractive market prospects across Canada.
Preliminary results of two clinical research trials were announced in the fiscal quarter ended September 30, 2008. The first trial indicated that COLD-FX affects the human immune system by targeting the adaptive pathway, that is the immunity developed throughout life. The second trial demonstrated that COLD-FX significantly supplements the flu shot's effectiveness in seniors and reduces the incidence of colds and flu by one-third.
Projects currently planned or in the clinical trial phase include a United States National Cancer Institute approved and Wake Forest University-led multi-centre study on the safety and efficacy of COLD-FX for preventing colds and flu and strengthening immune systems in patients with chronic lymphocytic leukemia. Other projects in fiscal 2009 include clinical trials in immunological, neurological and metabolic related areas.
The Company is actively recruiting a new Chief Executive Officer. Dr. Jacqueline Shan, the Company's President and Chief Scientific Officer, relinquished the CEO position in September of 2008 to focus intensively on the scientific and product development opportunities that will drive CV Technologies' growth and performance. The Company is substantially increasing its investments and expenditures in research and development. Product development has been completed for two new products and planning is underway for at least one product launch during the 2009 calendar year.
New products are aimed at providing additional revenue and more consistent cash flow in future periods, reducing the seasonality of the Company's revenue stream, and enabling better deployment of personnel and other resources.
CV Technologies advised in October 2008 that it would implement a Normal Course Issuer Bid (NCIB) to purchase up to 5,386,175 (5%) of its issued and outstanding common shares. Management believes that the current market price of the shares does not accurately reflect their underlying value. The Company has been in a blackout period since the NCIB was put in place; however, the Company will be allowed and expects to begin purchasing shares under the NCIB following the release of its first quarter 2009 results. The NCIB will expire on October 15, 2009.
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Summary of consolidated financial results
(in thousands except for per share amounts)
Fiscal Year Fiscal Year
September 30, 2008 September 30, 2007
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Revenues 49,389 42,035
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EBITDA 9,007 (4,427)
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Net earnings (loss) 4,592 (9,831)
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Earnings (loss) per common share -
basic 0.04 (0.09)
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Earnings (loss) per common share -
diluted 0.04 (0.09)
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Cash flow prior to working capital
changes 6,156 (6,109)
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Working capital 13,742 (5,757)
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Total assets 41,850 41,308
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Long term debt and obligations under
capital lease
(including current portion) 7,021 3,334
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Shareholders' equity 21,282 15,506
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Detailed Financial Statements and Management's Discussion and Analysis
A complete set of Financial Statements and Management's Discussion and Analysis for the year ended September 30, 2008 will be available on SEDAR (www.sedar.com) tomorrow and posted on the Company's web site today. The financial results presented in this news release are a summary only and readers are encouraged to read the full text of the Financial Statements and Management's Discussion and Analysis for important additional information.
ABOUT CV TECHNOLOGIES INC.
CV Technologies, founded in 1992, strives to transform people's lives to be healthier and happier by focusing on prevention and recovery through the use of evidence-based naturally-derived health products. The Company's lead product COLD-FX strengthens the immune system and is widely used as a leading over the counter remedy ("OTC") for helping to prevent and relieve cold and flu infections.
This news release and the referenced Management's Discussion and Analysis ("MD&A") contain certain forward-looking information within the meaning of applicable securities laws. The forward-looking information included in these documents does not guarantee future performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: those comments predicting the timing and/or initiation of clinical trials, clinical trial results, and associated regulatory clearances, financing and acceptance of COLD-FX(R) in the marketplace. The use of any of the words "aims", "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "would", "project", "could", "should", "believe", "plans", "targets", "intends" and similar expressions are intended to identify forward-looking information. In addition to the risks outlined in the Risks and Uncertainties section of the MD&A, the MD&A and this news release contain forward-looking information pertaining to the following: the impact of competition; incidence of cold and flu; consumer confidence and spending levels; general economic conditions; interest and currency exchange rates; unseasonable weather patterns; the cost and availability of capital; the cost and availability of grants/funding; and product development . The Company can give no assurance that the recruitment process will lead, in a timely fashion, to the hiring of a Chief Executive Officer or that the restructuring will lead to new product commercialization. The Company believes that the expectations and assumptions reflected in the forward-looking information contained herein are reasonable but no assurance can be given that these expectations and assumptions are correct and that the results, performance or achievements expressed in, or implied by, forward-looking information within this disclosure will occur, or if they do, that any benefits may be derived from them. All forward-looking information is expressly qualified in its entirety by this cautionary statement. The Company assumes no duty to update or revise forward looking information, except as may be required pursuant to applicable laws. The Company claims exemption under U.S. SEC Rule 12g3-2(b).
SOURCE: CV Technologies Inc.
CV Technologies - Media Contact Warren Michaels Vice President, Communications (780) 432-0022 Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.cvtechnologies.com CV Technologies - Investor Contact Jane Tulloch Director, Investor Relations (780) 577-3724 Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.coldfx.com
