CVF Technologies Reports Results for 2007
April 18 2008 - 5:30PM
PR Newswire (US)
WILLIAMSVILLE, N.Y., April 18 /PRNewswire-FirstCall/ -- CVF
Technologies Corporation (OTC:CNVT) (BULLETIN BOARD: CNVT) a
holding company that is involved in the business of developing and
managing early stage companies primarily engaged in the clean-tech
sector today reported financial results for the fiscal year 2007.
2007 Financial Results -- Judging CVF on its income statement alone
is not very helpful due to significant changes in revenue and
income that can occur from quarter to quarter and from year to
year. An example of how this revenue fluctuation can occur is when
CVF's ownership interest in one of its portfolio companies goes
below 50%. The portfolio company may still have significant revenue
as does Biorem whose revenue was cdn $9,469,000 for year ended
December 31, 2007. However that revenue is not shown in CVF's
income statement. It is therefore important to focus on CVF's
business model which is to invest its capital and human resources
primarily in early stage, clean-tech companies with significant
growth potential. The intent is to develop these companies until
they either go public as did Biorem in January 2005, or are
acquired as was Gemprint in December 2005. When these events occur
there will be a significant increase in CVF's income, as there was
in 2005, when Gemprint was sold. In order to pass this realization
of value to its shareholders CVF may initiate a stock repurchase
program as it did in 2006, when it repurchased a total of
$1,626,400 of its preferred and common shares, or it may decide to
issue dividends to its shareholders. It may also decide to invest
some of its funds in its current portfolio or in new business
opportunities. Portfolio Highlights -- Biorem -- (24% owned by CVF)
New orders received in the fourth quarter were cdn $3,400,000. The
order backlog increased to cdn $10,017,000 from cdn $9,500,000 in
the prior quarter. This is the fourth straight quarter of backlog
increase. Revenue in the fourth quarter was cdn $2,938,000 (which
is not included in CVF's consolidated revenue due to GAAP
accounting rules), up from cdn $2,547,000 in the third quarter as
well as up for the third straight quarter. Biorem remained focused
on building its order backlog, cost reduction and price adjustments
to improve its gross margin. Biorem is projecting that the sales
momentum and backlog increase that has been building for three
straight quarters will continue. From the second quarter of 2007,
bookings have approached an annualized rate of cdn $15,000,000. Its
efforts are well advanced to shift operational and project expenses
to the US in order to match the US-based orders and thereby
minimize the effects of fluctuations in the US dollar value.
Operating expenses for Biorem in the fourth quarter of cdn
$1,168,000 are up cdn $220,000 compared to 2006, primarily due to
an increased focus on research and development combined with a
lower offset of investment tax credits. In addition, there was a
cdn $210,000 swing from a foreign exchange gain in the fourth
quarter of 2006 of cdn $132,000 to a foreign exchange loss in the
fourth quarter of 2007 of cdn $78,000 but significantly less than
the prior quarter. This reflects a decrease in the value of US
dollar denominated net working capital assets. Also affecting net
income was a non-cash income tax expense of cdn $82,000 in the
fourth quarter. This resulted in a net loss of cdn $152,000 for the
fourth quarter 2007. At the end of the year, Biorem had cash and
cash equivalents in the amount of cdn $2,261,000 and net working
capital of cdn $3,864,000. The cash balance and working capital are
considered adequate to fund the future operating requirements of
the business. Xylodyne Corporation -- (40% owned by CVF) In March
and April of 2006 CVF invested cdn $325,000 in Xylodyne
Corporation, a newly formed company which focuses on the
development and distribution of 4-wheel drive off road electric
vehicles. The mission of Xylodyne Corporation is to further the
sales of environmentally friendly electric vehicles. Xylodyne has
two business units: Recreational Vehicles and Engineering Services.
The Recreational Vehicle group sells and services off road electric
vehicles that are targeted at outdoorsmen but also has applications
in the mining and turf care area. The Engineering Services group
assists companies in the development of new electric and hybrid
vehicles. In 2007, Xylodyne established a joint venture with Ecoval
to develop and market a line of products into Ecoval's sales
channels. The first of these initiatives should launch in mid-2008.
These vehicles are offered to the personal recreational market as
well as to government agencies, conservation authorities and the
mining industry. Xylodyne is currently focusing its efforts on
building its distribution network for its vehicles in the US and
Canada, where it has now signed dealers in New York, Delaware,
Maryland, Massachusetts, and Ontario. CVF owns 40% of the equity of
the company plus holds a two year note for cdn $313,000 from
Xylodyne. Xylodyne achieved sales of $1,799,700 for 2007 and in
2008 Xylodyne will continue to aggressively work to expand its
dealer network in the northeastern United States and Canada. Ecoval
-- (85% owned by CVF) The Ecosense herbicide, produced and marketed
by Scotts Canada, its licensee, is available in every major retail
chain in Canada and has become the leading environmentally friendly
herbicide in Canada. Ecoval has also signed an exclusive
distribution agreement with Plant Products the largest commercial,
non-retail horticultural distributor in Canada for Ecoval's
EcoClear herbicide product. The Scotts and Plant Products
agreements are expected to make Ecoval's herbicide the dominant
product of the non-chemical herbicide products in Canada. Ecoval
now plans to leverage off its success in Canada to begin an
aggressive marketing campaign in the US as it seeks out partners
similar to what has been achieved in Canada. Ecoval is continuing
its negotiations with large multinational corporations to offer its
herbicide product to the US market in an exclusive distribution
agreement. An agreement of this type has the potential to produce
significant income to Ecoval in future years. Ecoval hopes to
complete these negotiations in the coming months. Ecoval is also in
serious discussions with a number of companies to add additional
products. Ecoval will continue to grow its sales by further
promotion of its current product line. This includes supporting the
current marketing programs, signing up new distribution partners
and licensees, and entering new markets. Ecoval will also look to
cut expenses through improvements in manufacturing, raw materials
cost, and logistical management. The company is working on a number
of business development projects to launch new products into
Ecoval's distribution channels, including the joint venture with
Xylodyne Corporation. G.P. Royalty Distribution Corporation --
(formerly Gemprint Corp,) -- (65% owned by CVF) was formed to
receive potential royalty distributions from Collectors Universe
Corp who purchased the assets of Gemprint in December 2005. The
royalty agreement is for $1 for each Gemprint over 100,000
Gemprints per year until December 2010. Gemprint is a unique
non-invasive identification system for diamonds. Based on
Collectors Universe's recent press releases they have made their G
Cal diamond grading program a core part of their business model and
Gemprint is a key component of it. Petrozyme -- (50% owned by CVF)
is continuing to explore marketing opportunities for its
proprietary biologically based remediation technologies for the
petroleum and petrochemical industries. The company is seeking a
partnership or licensing agreement with a major North American
environmental company as well as licensing agreements in the Middle
East. CVF GAAP financial results for 2007 -- On a consolidated
basis CVF reported an increase in revenue of $474,100 for 2007
primarily due to an increase in sales from Xylodyne, its new
investee company. It should also be noted that Biorem's revenue of
cdn $9,469,000 for 2007 is not consolidated in CVF's financial
statements as CVF owns less than 50% of Biorem. Net loss for 2007
of $2,085,800 compared to a loss of $1,845,100 in 2006. This
equates to a loss per share of $0.16 for 2007 compared to a loss
per share of $0.14 for 2006. In 2007 CVF's portion of Biorem's loss
was $575,300 compared to CVF's portion of Biorem's loss in 2006 of
$188,100. CVF Technologies Corporation (http://www.cvfcorp.com/) is
headquartered in Williamsville, New York. CVF is a technology
development company, whose principal business is sourcing, funding
and managing emerging pre-public, clean-tech companies with
significant market potential. Certain statements made in this press
release which are not historical facts are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Investors are cautioned that these statements involve
risks and uncertainties, which may cause actual results or
achievements to be materially different from any future results and
achievements expressed or implied by the forward-looking
statements. These risks include, but are not limited to, product
demand and market acceptance risks for the products and
technologies of CVF's subsidiary companies and investees; the
impact of competitive products, technologies and pricing; delays or
difficulties in developing, producing, testing and selling new
products and technologies; the ability of the company's
subsidiaries and investees to obtain necessary financing for their
operations and to consummate initial public offerings of their
stock; the effect of the Company's accounting policies; the effect
of trade restrictions and other risks detailed in the company's
Statement on Form 10-SB/A filed with the U.S. Securities and
Exchange Commission and any subsequent filings with the Commission.
For more information please contact: http://www.cvfcorp.com/
DATASOURCE: CVF Technologies Corporation CONTACT: Robert L. Miller,
Chief Financial Officer, +1-716-565-4711, or Jeffrey Dreben,
President & CEO, +1-716-565-4711, both of CVF Technologies
Corporation Web site: http://www.cvfcorp.com/
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