Ceapro Inc., today reported 47% increase in sales for the third quarter ended September 30, 2008. Revenues reached $871,000 compared with $591,000 in the same period last year. This was achieved despite a lower US dollar exchange rate for the first nine months of 2008 and an interruption in the supply of key raw material due to flooding in the Midwest U.S. during July and August. Globally, there is a growing demand for Ceapro's natural and organic active ingredients and the Company has taken several actions to increase gross margins and to be in a position to respond to an expected overall increased demand in 2009.
Strategic Review Initiatives
In August 2008 the Board and the Management of Ceapro announced several strategic initiatives that have been quickly implemented. The focus of the Company on its core expertise - extracting active ingredients from natural sources - has delivered good growth in revenues during the third quarter and the Company foresees increased sales for the rest of the year and in 2009.
A contract manufacturing organization will be contracted for supplement production of bulk intermediates during the fourth quarter, while the finishing manufacturing steps will continue to be done at the Company's facilities in Leduc, Alberta. This will allow the Company to increase sales and gross margins in 2009.
Out-licensing discussions are advancing well with a strategic partner for the Company's proprietary diabetes test meal CeaProve(R).
Financial Highlights for Third Quarter and Nine Month Period Ended September 30, 2008
- Sales of active ingredients to personal care markets were $871,000 for the quarter and $3,179,000 for the nine-month period, compared with $591,000 and $2,671,000 in the corresponding periods in 2007.
- Gross margins were at 30% for the quarter and 38% for the nine-month period, down substantially from the same periods in 2007. The majority of costs are variable in relation to volume and specific formulation of products but the Company continues to face pressures from higher labor costs and labor shortages, rising commodity prices, and a lower US dollar during the first nine months of 2008.
- For the third quarter and nine-month period, R&D expenses increased 54% and 62% respectively due to hiring of new scientific personnel to develop products and new technologies. In the cosmeceutical and nutraceutical fields, this is vital in order to satisfy customers request for very high-quality ingredients and new products.
- Net loss for the quarter was $488,000 or $0.01 per share, compared with a net loss of $602,000 or $0.01 per share in 2007.
The complete audited annual report and financial statements are available for review on SEDAR at http://sedar.com/Ceapro and on the Company's website at www.ceapro.com.
About Ceapro Inc.
Ceapro Inc. is a Canadian growth-stage biotechnology company. Primary business activities relate to the development and commercialization of organic products for personal care and cosmetic industries using proprietary technology and natural, renewable resources. The commercial line of natural and organic active ingredients include beta glucan, avenanthamides (colloidal oat extract), oat powder, oat oil, oat peptides and lupin peptides.