Organic Resource Management Inc. Reports Fiscal 2010 Second Quarter Results

WOODBRIDGE, ON, Feb. 11 /CNW/ - Organic Resource Management Inc. (TSX-V: ORI) ("ORMI" or "the Company"), today reported its financial results for the three and six-month periods ended December 31, 2009 .

    
    Q2 2010 Highlights:
    -   Net income for Q2 2010 was $163,000 compared to an adjusted net loss
        (see below) of $57,000 in Q2 2009.
    -   Basic and fully diluted income per share was $0.04 for Q2 compared to
        an adjusted loss (see below) of $0.01 per share for Q2 2009.
    -   Comparative core business revenues increased 14% from Q2 2009.
    -   Gross margin as a percentage of revenue improved to 39% from 32% in
        Q2 2009.
    

"We are pleased to report strong results this quarter, driven by continued growth in our core grease trap collection business" said Charles Buehler , Chairman and Chief Executive Officer of ORMI. "We have made significant progress toward replacing the non-core revenue we sold last year, and our success demonstrates that the divesture of those assets was the right move. It both strengthened ORMI's balance sheet and improved the bottom line."

Financial Results

Revenues on a comparative basis adjusting for the sale of non-core assets increased 14% over the same quarter last year. Total revenues for the three months ended December 31, 2009 increased 4% to $3,352,000 from $3,217,000 for the three months ended December 31, 2008 .

Gross margin for the second quarter of fiscal 2010 increased 27% to $1,318,000 from $1,038,000 for the second quarter of fiscal 2009. As a percentage of revenue, gross margin improved to 39% for the second quarter of fiscal 2010, up from 32% for the same quarter last year. One-time costs related to the sale of non-core assets in October 2008 negatively impacted margins in the second quarter last year.

Total operating expense for the second quarter of fiscal 2010 decreased 4% to $1,158,000 from $1,204,000 for the same quarter last year, excluding the gain on the sale of non-core assets.

Net income for the second quarter of fiscal 2010 was $163,000 compared to an adjusted net loss of $57,000 for the second quarter of fiscal 2009 taking into account the positive impact last year of two non-recurring items totalling $1,528,000 . These items included a gain of $1,708,000 on the sale of non-core assets, partially offset by approximately $180,000 of one-time costs related to the sale and the subsequent re-branding of the Company's assets in British Columbia under the ORMI banner and the relocation of the Company's Vancouver operations to a new facility. Actual net income for the second quarter of fiscal 2009 was $1,471,000 .

Basic and fully diluted income per share were $0.04 for the quarter compared to an adjusted loss of $0.01 per share for the same period last year taking into account the two non-recurring items. Last year's actual basic and fully diluted income per share for the quarter was $0.33 .

Cash flows from operating activities were $562,000 for the second quarter of fiscal 2010 compared to $338,000 for the same period last year. The increase in cash flows was mainly due to additional cash generated from operations before changes in non-cash operating assets and liabilities.

For the six months ended December 31, 2009 , total revenues were $6,782,000 compared to $7,265,000 for the six months ended December 31, 2008 . On a comparative basis adjusting for the sale of non-core assets, total revenues for the first half of the year were 12% over the same period last year. For the six months ended December 31, 2009 , gross margin was $2,688,000 , or 40% of revenue, compared to $2,555,000 , or 35% of revenue, for the same period last year. The gross margin increased in the first half of fiscal 2010 mainly because the Company diverted significantly more of its residuals to Ontario farm-based ADs, as compared to the first half of fiscal 2009. For the six months ended December 31, 2009 , total operating expense decreased 5% to $2,329,000 from $2,444,000 for the same period last year, excluding the gain on sale of non-core assets.

Net income for the first six months of fiscal 2010 was $367,000 compared to an adjusted net income of $117,000 for the first six months of fiscal 2009 taking into account the two non-recurring items. Actual net income for the first six months of fiscal 2009 was $1,645,000 . For the six months ended December 31, 2009 basic and fully diluted income per share was $0.08 compared to an adjusted income of $0.03 per share taking into account the two non-recurring items. Last year's actual basic and fully diluted income per share for the six months ended December 31, 2008 was $0.37 . For the six months ended December 31, 2009 , cash flows from operating activities were $628,000 compared to $720,000 for the same period last year.

As at December 31, 2009 , the Company had cash and cash equivalents of $749,000 and net working capital of $1,561,000 , compared to cash and cash equivalents of $575,000 and net working capital of $1,204,000 as at June 30, 2009 .

The comparative financial statements for the three and six months ending December 31, 2009 along with other information may be obtained through the Company's website at www.ormi.com, or on SEDAR at www.sedar.com.

This press release is available on the Company's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit the investor relations section of the Company's website at www.ormi.com/ir/index.php. Alternatively, investors are asked to e-mail all questions and correspondence to [email protected] where they can also request addition to the Company's investor e-mail list to receive all future press releases and updates directly.

About Organic Resource Management Inc.

Organic Resource Management is Canada's largest provider of vacuum truck services for the collection, processing and recycling of food-related organic residuals. ORMI services in excess of 6,000 regular scheduled commercial, industrial, institutional and residential customers in Ontario, Quebec and British Columbia. Further information about ORMI may be obtained at the Company's web site at www.ormi.com.

Note: Certain information contained in this press release may be forward-looking and therefore subject to unknown risks or uncertainties. The actual results, performance or achievements of Organic Resource Management Inc. may differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information: Organic Resource Management Inc., Charles Buehler, Chairman and CEO, Tel: [phone], Email: [email protected], Website: www.ormi.com; The Equicom Group, Glen Williams, Investor Relations, Tel: [phone] ext. 272, Email: [email protected]