BIOREM Technologies Inc. Reports Third Quarter Results

GUELPH, ON, Nov. 29, 2011 /PRNewswire/ - BIOREM Inc. (TSX-V: BRM) ("Biorem" or "the Company") today announced its results for the three-month period ended September 30, 2011. Biorem's complete 2011 third quarter financial statements and MD&A have been filed on SEDAR (www.sedar.com).

Revenue year to date for the Company is $8,597,000 or a 33% decrease from prior year results. This decrease is a direct result of actions taken by management to realign its production schedule and improve its order fulfillment processes. Materials required for production are being procured and revenue is recognized closer to the anticipated customer delivery date. These changes improve the company's liquidity and cash management; unbilled revenue is reduced and cash flow is improved. All of the required changes were made within the quarter.

Bookings for the year total $13,800,000 which is a 4.60% decrease compared to 2010. During the year the Company has obtained orders for biogas processing exceeding $4.5 million which helps to offset the slower orders from the North American municipal odour control market. Backlog at the end of Q3 increased to $15.9 million up from $12.0 million at the end of Q2.

At the end of the second quarter, the company indicated it was going to address its liquidity by amending its order fulfillment process with the purpose of improving cash flow and liquidity. As a result Unbilled Revenue at the end of Q3 was reduced to $1.3 million, a reduction of 71% from the previous quarter. Accounts Payable was reduced to $5.4 million, a reduction of $1.5 million from the previous quarter. Accounts Receivable has risen to $5.5 million from $3.5 million in the previous quarter reflecting the transition of Unbilled Revenues to Shipments and then to Accounts Receivable. The impact of this management decision had a negative material effect on the Income Statement during the 3^rd Quarter. During the third quarter the Company used cash flow from operations in the amount of $623,000 and has working capital of $2.1 million excluding current portion of long term debt. The current working capital is considered adequate to fund the future requirements of the business for the foreseeable future.

The market for the Company's odour control products is showing no growth which is in part attributable to a slowdown in capital infrastructure spending by United States' municipalities while biogas products show promising growth. The VOC products are still at an early stage and pilot field testing results to date are encouraging.

"Biorem recognizes that the results of the third quarter are not what our investors would expect from our Company," said Peter Bruijns, President and CEO. "A change in the Company's production cycle was needed and the Company focused on this change exclusively in the third quarter. The negative income statement impact is a single quarter event and does not indicate a fundamental change in quarterly revenues."

During the third quarter the Company had identified an error in the allocation of costs as at June 30, 2011 to certain projects that are accounted for on a percentage completion basis. As a result the Company amended the Q2 2011 financial statements and re-filed them as restated.

The correction of the error has an effect on the second quarter condensed consolidated interim financial statements as listed below:

• The Company reduced its total assets and shareholders' equity by $243,000 from $13,060,094 to $12,817,094 and from $3,636,993 to $3,393,993, respectively at June 30, 2011.
• Revenue was reduced, and the net loss and total comprehensive loss was increased for the three months ended June 30, 2011 by $243,000 from $4,144,674 to $3,901,674, from ($253,248) to ($496,248), and from ($247,675) to ($490,675) respectively.
• Revenue was reduced, and the net loss and total comprehensive loss was increased for the six months ended June 30, 2011 by $243,000 from $7,876,931 to $7,633,931, from ($272,594) to ($515,594) and from ($324,716) to ($567,716) respectively.
• There was no impact on the Company's reported cash generated from (used in) operations.

In the third quarter, the Company revised its control processes to prevent future errors in recognizing revenue.

This restatement only impacts the Company's 2011 second quarter results.

About BIOREM Inc.
Biorem is a leading clean technology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds (VOCs), and hazardous air pollutants (HAPs). With sales and manufacturing offices across the continent, a dedicated research facility, a worldwide sales representative network and more than 600 installed systems worldwide, Biorem offers state-of-the-art technology-based products and peace of mind for municipalities, industrial companies and their surrounding communities. Additional information on Biorem is available on our website at www.biorem.biz.

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.

Forward-Looking Statements
This press release contains forward-looking statements based on current expectations. These forward-looking statements contain various risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the disclosure materials, financial statements and MD&A filed with the securities regulatory authorities in Canada on www.sedar.com.

"Order Bookings" and "Order Backlog" do not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and may not be comparable to measures presented by other companies.

Order Bookings and Order Backlog are non-IFRS measures that the Company uses to evaluate its sales performance. Order Bookings are those binding contracts that the Company enters into with a third party for the delivery of our products or services. As Order Bookings are received, the contract value (before any associated sales taxes) is included in the Order Backlog. The Order Backlog is reduced by the revenue that is recognized on each project and then adjusted for any currency changes.

SOURCE Biorem Inc.