TORONTO, ONTARIO , 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.
Contacts: reWorks Environmental Corp. Don Green Chairman and
Chief Executive Officer (416) 674-1365 Email: dgreen@forterra.ca
Website: www.forterra.ca
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