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Ceapro Inc. (CV:CZO) Reports 2010 Second Quarter Financial and Operating Results


8/5/2010 10:17:42 AM

EDMONTON, ALBERTA--(Marketwire - August 05, 2010) - Ceapro Inc. (TSX VENTURE: CZO) today reported financial results and operating results as at and for the three-month and six-month periods ended June 30, 2010.

Second Quarter highlights


--  Completion of a license and distribution agreement with Oat Cosmetics
    for the sale of Ceapro's "All Natural" active ingredients in the United
    Kingdom. 
--  Announcement of a Research Collaboration with the National Research
    Council of Canada (NRC). Research studies to be conducted at the NRC
    Institute for Nutrisciences and Health (INH) located in Charlottetown,
    Prince Edward Island. Press conference held with Federal Ministers of
    Science and Technology and Fisheries and Oceans, Honourable Gary
    Goodyear and Gail Shea respectively. Also in attendance was the
    Provincial (PEI) Minister of Environment, Energy and Forestry, the
    Honourable George Webster. 
--  Initiation of development of new formulations and testing for Ceapro's
    second generation products with all natural preservative. 

Subsequent to Quarter-End

--  Ceapro reduces debt $270,500 as royalty holders elect to exchange
    royalty debt for equity. 
--  Ceapro receives approval from TSX-V to issue 271,752 common shares to
    pay interest on convertible debentures due at June 30, 2010 
--  Government of Alberta provides Ceapro with a grant of $124,000 to
    conduct a two year research project using University of Alberta
    technology to optimize extraction of Ceapro's active ingredients. 

Financial results as at and for the three-month periods ended June 30, 2010

--  Sales were $1,018,000 for the three-month period ended June 2010
    compared to $1,212,000 for the same period in 2009.This 16% decrease is
    primarily due to the absence of sales to the animal health sector and a
    lower US dollar exchange rate versus the Canadian dollar. Sales of
    active ingredients to the personal care industry increased in volume by
    6% following increased shipments of newly launched lupin peptides to be
    used in a new hair care line. 
--  Research and Development investments amounted to $143,000 for the three-
    month period ended June 30, 2010. This is similar to the R&D Investments
    for the same period in 2009. It is expected that R&D investments will
    increase during the second half of 2010 due to the initiation of three
    new projects that will allow Ceapro to get new data to further support
    health benefits claims for its products. 
--  General and Administration expenses amounted to $323,000 for the three-
    month period ended June 30, 2010 compared to $417,000 for the same
    period in 2009. This 23% decrease reflects the Company's effort to
    reduce expenditures and focus on core areas of the business. 
--  Income from Operations was $52,000 for the three-month period ended June
    30, 2010 compared to $216,000 for the same period in 2009.The absence of
    sales to the animal health sector is primarily responsible for this
    decrease. 
--  Net Income amounted to $237,000 for the three-month period ending June
    30, 2010 compared to $466,000 for the same period in 2009. Net income
    includes the recovery of $315,000 for legal fees as at June 30, 2010.
    Legal fee recoveries of $426,000 were also recorded as a recovery in the
    second quarter of 2009. 

"Results obtained so far in 2010 are in line with our expectations during this period of economic recovery in the personal care industry. While we are pleased with these results, we are excited that Ceapro is now in a position to invest in Research and Development in partnership with both Federal and Provincial Governments and other research institutions. This recognition will allow Ceapro to develop new products and rejuvenate some existing ones with new data to support Ceapro's marketing and sales strategy." stated Gilles Gagnon, Acting President and CEO.

The complete audited annual report and financial statements are available for review on SEDAR at http://sedar.com/Ceapro and on the Company's website at www.ceapro.com .

About Ceapro Inc.

Ceapro Inc. is a Canadian growth-stage biotechnology company. Primary business activities relate to the development and commercialization of active ingredients for personal care and cosmetic industries using proprietary technology and natural, renewable resources.


CEAPRO INC.                                                               
Consolidated Statements of Net Income, Comprehensive Income and Deficit   
Unaudited                                                                 

                                     Six Months                  Quarters 
                                     Ended June                Ended June 
                                             30                        30 
                              2010         2009         2010         2009 
--------------------------------------------------------------------------

Revenue                                                                   
  Sales               $  2,173,343 $  2,713,927 $  1,018,481 $  1,212,018 
  Cost of goods sold     1,250,046    1,097,814      557,928      446,775 
--------------------------------------------------------------------------

Gross margin               923,297    1,616,113      460,553      765,243 

--------------------------------------------------------------------------

Expenses                                                                  
  General and                                                             
   administration          613,602      807,516      322,929      417,194 
  Royalties                 25,956      214,458       12,762       76,431 
  Sales and marketing       39,116       85,063       17,947       24,761 
  Amortization              16,891       20,809        8,363       11,511 
  Write off of                                                            
   property plant and                                                     
   equipment                10,490            -       10,490            - 
  Interest on                                                             
   convertible                                                            
   debentures               21,096            -       11,071            - 
  Accretion on                                                            
   convertible                                                            
   debentures               15,000            -        7,500            - 
  Interest on long-                                                       
   term debt                35,831       38,794       17,687       18,880 
--------------------------------------------------------------------------

                           777,982    1,166,640      408,749      548,777 
--------------------------------------------------------------------------

Income from operations     145,315      449,473       51,804      216,466 
--------------------------------------------------------------------------

Other income                                                              
 (expenses)                                                               
  Research and product                                                    
   development            (282,098)    (281,195)    (143,970)    (145,624)
  Other income                                                            
   (expenses)               10,376      (25,870)      14,591      (31,210)
--------------------------------------------------------------------------

                          (271,722)    (307,065)    (129,379)    (176,834)
--------------------------------------------------------------------------

Comprehensive income                                                      
 (loss) before SGGF                                                       
 legal fees recovery                                                      
 (expense) and income                                                     
 taxes                    (126,407)     142,408      (77,575)      39,632 

SGGF legal fees                                                           
 recovery                  314,983      426,300      314,983      426,300 
Income taxes                                                              
  Current                   59,000      241,000       37,000      184,000 
  Reduction as a                                                          
   result of applying                                                     
   non-capital losses                                                     
   carried forward                                                        
   against the current                                                    
   period's taxable                                                       
   income                                                                 


                           (59,000)    (241,000)     (37,000)    (184,000)
--------------------------------------------------------------------------

NET INCOME AND                                                            
 COMPREHENSIVE INCOME                                                     
 FOR THE PERIOD            188,576      568,708      237,408      465,932 

Deficit, beginning of                                                     
 period                 (7,390,890)  (7,321,541)  (7,439,722)  (7,218,765)
--------------------------------------------------------------------------

Deficit, end of period$ (7,202,314)$ (6,752,833)$ (7,202,314)$ (6,752,833)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Net income per share:                                                     
  Basic               $       0.00 $       0.01 $       0.00 $       0.01 
--------------------------------------------------------------------------
--------------------------------------------------------------------------
  Diluted             $       0.00 $       0.01 $       0.00 $       0.01 
--------------------------------------------------------------------------
--------------------------------------------------------------------------

See accompanying notes                                                    


Contacts:
Branko Jankovic
Chief Financial Officer
780-917-8376
bjankovic@ceapro.com
www.ceapro.com


Read at BioSpace.com


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