EDMONTON, ALBERTA--(CCNMatthews - Feb. 8, 2007) - CV Technologies Inc. (TSX:CVQ) today released its financial results for the first quarter ending December 31, 2006. The Company reported an increase in net revenues of 33% to $25.2 million from $18.9 million for the same period last year.
Earnings before tax were $1.8 million compared to $7.5 million for the same quarter in the prior year. Loss after tax was $1.6 million compared to $4.4 million profit for the same quarter in the previous year.
The Company made significant investments in brand building, infrastructure, marketing and professional awareness as part of its business plan to launch COLD-fX(R) into the U.S. market. Development of consumer awareness and trial is in the early stages.
Income taxes exceeded the consolidated before tax earnings. While Canadian earnings attracted tax, foreign operations incurred a loss for the quarter. Since the Company is taxed in the countries in which it operates, application of losses from one country against the taxable income of another country is not possible.
Highlights of the quarter were:
- Sales increase of 33%
- Sizeable brand building investment in the U.S.
- Extensive distribution network in the U.S.
- Significant scientific awareness in U.S.
COLD-fX(R) demonstrated strong sales growth and continues to be ranked as the number one selling cold and flu remedy in Canada (ACNielsen's MarketTrack Drug Service for Cold Remedies, Natural Supplements & Vitamins Categories for the 52-week period ending September 2, 2006). This sales performance occurred during unusually mild winter months.
"While sales demonstrated robust growth, we will continue to build on our established Canadian business and energetically search for and foster new growth opportunities including new product lines," explained Dr. Jacqueline Shan, President, CEO and Chief Scientific Officer for CV Technologies. "In the U.S. we are in the early period of establishing the COLD-fX brand with only twelve weeks of consumer exposure. Our initial investment has resulted in an excellent distribution network and a strong foundation for lasting brand equity. We believe that COLD-fX will become a product of preference for the U.S. public as it has become for Canadian consumers."
Dr. Shan continued, "The next stage of the Company's growth will see a strengthened and restructured senior management team, an optimized U.S. investment strategy aligned with sales, and a marketing plan more directly targeted to health conscious consumers and their influencers to take advantage of our strong scientific foundation."
ABOUT CV TECHNOLOGIES INC.
CV Technologies, founded in 1992, is a global leader in the development and commercialization of naturally derived, evidence based, natural therapeutics for disease prevention and health maintenance. The Company's lead product - COLD-fX(R) - strengthens the immune system and is widely used as a leading over the counter remedy (OTC) for preventing and relieving cold and flu infections. In the United States it is marketed as an immune enhancing dietary supplement. COLD-fX(R), with its unique and patented mechanism of action was standardized according to the Company's ChemBioPrint (CBP) Process. The CBP process precisely identifies the chemical profile and biological activity of multi-active compounds in evidence-based natural therapeutics. The CBP process also provides a manufacturing protocol that ensures each batch of the final product delivers verifiable and provable health benefits. All international patents and trademarks are held by fX Life Sciences International GmbH. COLD-fX(R) is distributed and sold in the U.S. by COLD-fX Pharmaceuticals (USA) Inc. Both companies are wholly-owned subsidiaries of CV Technologies.
This news release contains forward-looking statements that are subject to risks and uncertainties that may cause actual results or events to differ materially from the results or events predicted in this discussion, including those comments predicting the timing and/or initiation of clinical trials, clinical trial results and associated regulatory clearances, and the potential success of U.S marketing initiatives, corporate re-organization, and product acceptance in the U.S. Factors which could cause actual results or events to differ include, but are not limited to: the impact of competition; 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; product development and the risk that clinical trials may not demonstrate the safety and efficacy required to satisfy the regulatory authorities. Although we believe that the forward-looking statements contained herein are reasonable, we can give no assurance that our expectations are correct and that the results, performance or achievements expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. For a more in-depth account of risks and uncertainties, please refer to documents filed with the securities regulators on www.sedar.com. The Company assumes no duty to update this disclosure.