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| reWorks Environmental Issues Investor Update on Manufacturing
Progress and Reports Nine-Month Financial Results |
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Download this press release (PDF 27 KB)
- Adopting new, more cost-efficient production process requiring significantly less manufacturing space to produce higher volume; reduces capital
investment required by $1 million per plant.
- New production approach will enable reWorks to achieve triple the previously planned production capacity level in half the factory space.
- Using off-season months to build inventory of organic soil supplements to meet March-April fertilizing demand
- Planning expansion of manufacturing capacity beginning in 2008
Toronto, Ontario - November 30, 2007 - reWorks Environmental Corp. (TSXV:
REW), an emerging leader in the production and marketing of premium organic
soil enrichment products, today issued an investor update on its progress in
establishing its manufacturing operations and announced its nine-month financial
results.
"reWorks has been making good progress in establishing our production
capabilities for our premium organic products for soil enrichment based on worm
manure (worm castings) in our Toronto facility," reported Gary Gould, President.
"Perhaps more significantly with respect to our future growth and profitability, we
have moved ahead with the adoption of new production methods that will be
significantly more cost-efficient and will enable us to produce higher volumes in
far less manufacturing space, while requiring substantially less capital investment
than the process that we previously had begun to deploy.
"The new manufacturing approach will enable us to achieve triple the production
volume that we had previously expected using the process that we had
developed and installed. Further, we can achieve this increased output in half
the space that we previously believed would be needed (25,000 square feet
compared with 50,000 square feet). We also estimate that the new production
methods will require about $1 million less capital investment per plant than we
had previously planned. We expect that the new process will yield more
consistent production output with less downtime and expense for maintenance
and repairs needed," he said
"We have begun ramping up production in our Toronto plant using the new
process during this off-season period to build our inventory of soil enrichment
supplements. When the March-April fertilizing season arrives, we will be ready to
meet demand with our new line of organic soil enrichment supplement. By then,
as well, using the new manufacturing approach, we should have increased our
production capabilities several fold from the current levels," Mr. Gould reported.
"We are marketing these products under the name of our wholly owned operating
subsidiary, Forterra Inc. To get the full benefit of the link with our brand name,
we will be asking shareholders at our next annual meeting to approve the change
in our company's name to Forterra Environmental Corp.," Mr. Gould said.
"We are actively working on plans to expand our manufacturing capacity
beginning in 2008. As we firm up these plans, we will keep investors informed of
our progress," he added.
"With respect to the new process, we have determined that it will be more
efficient for us to source composting that meets our specifications, rather than
producing our own. We recently successfully concluded tests of composts from
outside sources and are negotiating a supply agreement with one or more of
these potential suppliers. Further, we have confirmed suppliers that can meet
our requirements for red wriggler worms in sufficient quantities for our production
plans.
"Over time, we also will be breeding our own worms to create the population that
will be needed as we grow our business. We already have established an
inventory of more than 4,000 pounds of worms toward ramping up the
manufacturing of our enrichment products," he said.
"During the next several months, we plan to initiate targeted sales programs to
potential customers in the core markets that we expect will recognize the benefits
of the organic Forterra soil enrichment products. These markets include golf
courses, municipalities, lawn care providers, nurseries, greenhouses, vineyards,
and others.
"Meanwhile, we have continued to carryout successful tests of our products with
various organizations for numerous plants, floriculture, viticulture, and agricultural
applications. We also have announced positive tests results from fertility trials of
our worm casting (also called vermicompost) conducted at the University of
Guelph Turfgrass Institute," Mr. Gould added.
"According to the Canadian Fertilizer Institute, the market for fertilizer in Canada
is about $5 billion in sales. With increased plants and production, we expect that
our Forterra soil enrichment products can serve a significant share of this
market," said Don Green, Chairman and Chief Executive Officer of reWorks.
Nine-Month Financial Results
reWorks Environmental is still in the formative stages of its development toward
becoming a mass-scale manufacturer of its soil enrichment products. Its
financial results reflect the investments being made in establishing
manufacturing, as well as in research and development and initial marketing and
sales activities. reWorks Environmental was formed in May 2007 through a
reverse takeover by reWorks Inc. of a company then called International
Bioanalogics Systems, Inc.
Results prior to March 31, 2007 relate solely to reWorks Inc. (subsequently
renamed Forterra Inc.). Results for the quarter ended September 30, 2007 also
include the results of the parent, reWorks Environmental Corp. from May 14,
2007, the date of the reverse takeover.
Revenues for the nine-months ended September 30, 2007 were $36,941
compared with nil in the 2006 period. The loss before other expenses was $1.5
million, compared with a loss in the nine-month 2006 period of $1.0 million.
These expenses included $0.5 million invested in research and development in
the 2007 period, compared with $0.3 million in the prior-year period. In addition,
the company incurred $0.4 million of expense in the initial set up and
modifications to its manufacturing facilities in the first nine months of 2007,
compared with $0.2 million in the 2006 period.
As reWorks has identified and installed the new, more cost-effective and efficient
approach to mass-scale manufacturing, it wrote down in the 2007 third quarter
the value of its previous manufacturing line from $1.4 million to scrap value of
$10,000.
As the result of adopting the new production process, the company wrote down
the value of its previous license and patent related to rotaries and worm gins by
$1.0 million to nominal value of $10,000. The total writedowns of $2.4 million for
the quarter and other expenses brought the net loss for first nine months of 2007
to $4.3 million ($0.08 per share), compared with a loss in the 2006 period of $1.1
million ($0.03 per share).
About reWorks Environmental Corp./Forterra Inc.
reWorks Environmental Corp., based in Toronto, through its wholly owned
subsidiary, Forterra Inc., is an emerging leader in the production and marketing
of premium organic soil enrichment products. These environmentally friendly
products boost fertility while replenishing the soil with organic matter, using worm
castings, for sustainable, long-term benefits, including stronger root growth and
drought and pest resistance. reWorks is the first company to commercialize the
indoor, large-scale production of totally organic soil-enrichment supplements.
Essentially, Forterra uses red wriggler worms to convert organic waste into
vermicompost or worm castings. Worm castings contain micronutrients, which
are required for healthy plant development. Worm castings also contain
microbes, which increase the rate at which plants take up available
macronutrients and micronutrients.
Forward-Looking Statements
This news release contains forward-looking statements based on current
expectations. These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially from those
reflected in these forward-looking statements. Such statements are based on
current expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such statements.
These uncertainties and risks include, but are not limited to, availability of
resources, competitive pressures, changes in market activity, and regulatory
requirements. Risks and uncertainties about reWORKS Environmental Corp.'s
business are more fully discussed in the company's disclosure materials,
including its annual information form and MD&A, filed with the securities
regulatory authorities in Canada. reWork's assumes no obligation to update any
forward-looking statement or to update the reasons why actual results could
differ from such statements.
The TSX Venture Exchange Inc. has neither approved nor disapproved of the
contents of this news release.
For further information, please contact :
Don Green
Chairman of the Board
reWORKS Environmental Corp.
Tel : 416-674-1365
Email : dgreen@forterra.com
www.forterra.ca |
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