EDMONTON, ALBERTA--(Marketwire - Dec. 27, 2007) - CV Technologies Inc. (TSX:CVQ) today released its financial results for the year ending September 30, 2007. On a consolidated basis annual net sales increased slightly to $42.0 million from restated $41.4 million for the same period last year.
Consolidated pretax loss for the year was $5.1 million, compared to restated pretax earnings of $4.1 million last year. The loss after tax was $9.8 million compared to restated earnings after tax of $0.6 million for the previous year.
Canadian annual net sales were essentially flat at $41.0 million (2006 - $41.3 million), year to year, while pretax profits were $8.5 million compared to last year's pretax profits of $7.9 million, an improvement of 6.8%. U.S. annual net sales for 2007 were $1.1 million (the first full year COLD-fX® entered the American marketplace). U.S. pretax loss was $13.6 million in 2007 compared to a pretax loss of $3.8 million in 2006.
For the three month period ending September 30, 2007, consolidated net sales have increased to $8.4 million from $8.3 million for the same period last year. Loss after tax was $1.1 million compared to restated after tax loss of $3.0 million for the previous year.
While this has been a year with disappointing results from the entry efforts into the U.S. marketplace, the U.S. sales efforts have been stabilized and will move forward on a controlled basis with investment in the marketing efforts aligned with revenues generated. The Company has broadly kept its U.S. retail customer base for the fall cold and flu season. On completion of the strategic plan, management recorded a write down of $814 thousand on deferred development costs and re-evaluated current inventories. An adjustment of $2.4 million was made for forecasted excess inventories, including packaging supplies to be rebranded.
As outlined in our July 10, 2007 news release, CV Technologies is in the process of finalizing and implementing its seven key priorities, continuing to use both strategic and legal advisors. Our focus for the next 12 to 24 months is on our core business in Canada and our goal is to create a national platform to allow our products to achieve leading market positions in their categories. Credit facilities with our new bank were completed in October.
Construction of the Company's new headquarters and research centre in Edmonton is near completion with occupancy in December. The organization has been restructured, including the hiring of a new Chief Operating Officer and Vice President, Sales. The creation of a national sales force in Canada is underway. Priorities included the formulation of a new strategic plan to maximize the value of the business, which is well underway. We have also retained financial advisors to assist us in the execution of the strategic plan and related matters.
"COLD-fX Extra Strength" and TV Campaign
In Canada our new product COLD-fX Extra Strength has been launched into the marketplace. There has been strong acceptance, with new listings from all existing customers. Shipments commenced in October. Revamped marketing and advertising programs for COLD-fX began this fall, with our first national television advertising campaign. It communicates the comprehensive treatment claims granted by Health Canada earlier this year. COLD-fX remains strongly positioned as the #1 selling cold and flu remedy in the country.
Update on Clinical Trial
The Company completed the treatment phase of a multi-centre trial, led by Dr. Gerald Predy, Edmonton's Medical Officer of Health, to test the effects of a two-fold higher dose of COLD-fX (versus the standard dose and placebo) on upper respiratory infections in vaccinated seniors. The scientific substantiation for the standard daily dose has already been sufficiently demonstrated, as was confirmed by the approval and NPN issuance by Health Canada.
The study is now in the analysis phase which is proceeding according to a normal schedule and standard industry practice for a trial of this size and complexity. Analysis includes data collection, organization, entry, and verification, all under blinded conditions. Performing analysis under blinded conditions ensures the study integrity is maintained because it is not known which subjects received COLD-fX and which received placebo. Once this is complete, the data will undergo independent numerical and statistical analysis and preparation for the scientific peer review and presentation process.
The Company recently agreed to collaborate with an internationally recognized flu expert, Dr. Albert Osterhaus, in the laboratory viral analysis component of the study. Based in the Netherlands, Dr. Osterhaus is one of the world's leading virologists and amongst the scientific achievements of his group of 100 scientists are the identification of the first human infection with avian flu H5N1 in 1997, and the identity of the SARS virus during the first outbreak in Hong Kong in 2003. The study quality will be further enhanced by this collaboration with the analysis and results expected to be completed in summer 2008.
A complete set of Audited Annual Financial Statements and Management's Discussion and Analysis will be made available on SEDAR (www.sedar.com). The financial results presented in this news release are a summary only and readers are encouraged to read the full text of the Audited Annual Financial Statements and Management's Discussion and Analysis for important additional information.
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® - 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 continues to rank 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 June 9, 2007). COLD-fX, 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.
This News Release and the referenced complete set of audited Annual Financial Reports on SEDAR contain certain forward-looking information and statements within the meaning of applicable securities laws. The forward-looking information and statements are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve 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 or statements 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® in the marketplace. The use of any of the words "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 statements. In addition to the risks outlined in the Risks and Uncertainties section of the MD&A, the MD&A contains forward-looking information and statements pertaining to the following: 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; and product development. The Company believes that the expectations and assumptions reflected in the forward-looking information and statements 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 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 Canadian securities regulatory authorities through the System for Electronic Document Analysis and Retrieval (SEDAR). Subject to its obligations under applicable law, the Company assumes no duty to update this disclosure. The Company is a 12g3-2(b) SEC registrant.