BIOREM Inc. (TSXV: BRM) ("Biorem" or "the Company") today announced results for the three month and six month periods ended June 30, 2014. Biorem's complete 2014 second quarter financial statements and MD&A have been filed on SEDAR (www.sedar.com).
Financial Summary:
Revenues for the quarter totaled $2,459,000, a 25% increase over revenues of $1,974,000 recorded during the first quarter of 2014 and a $2,550,000 or 51% decrease over revenues recorded during the second quarter of 2013. Year to date revenues have declined 52% to $4,433,000 compared to $9,195,000 in the same period in the prior year.
Gross profit for the quarter was 2.2% of revenue compared to 16.7% for the quarter ended March 31, 2014 and 26.9% for the quarter ended June 30, 2013. Gross profit for the quarter was negatively impacted during the quarter by the one-time provision for loss that was recorded against a project that requires remedial work. In the absence of this provision for loss, gross profit for the quarter would have been $656,000 or 23.7 % of revenue which is consistent with the gross profit percentage achieved in previous quarters.
For the six month period gross profit decreased by $2,200,000, an 85% decrease from the gross profit of $2,585,000 recorded for the six months ended June 30, 2013.
Operating expenses in the quarter of $748,000 were 31% lower than the $1,088,000 of expenses recorded in the same period in the previous year. For the six months ended June 30, 2014 operating expenses were $1,482,000, a 29% decrease over operating expenses of $2,073,000 in the comparable period in 2013. The decrease in operating expenses were largely the result of lower sales commissions earned on the lower revenue recorded, and by lower general and administrative costs and lower expenditures on research and development resulting from cost reductions initiated by the Company.
Net loss for the quarter and six months ended were $835,000, and $1,366,000 respectively compared to earnings of $254,000 and $223,000 in 2013. On a loss per share basis loss for the quarter was $0.06 per share and $0.11 per share for the six month period ended June 30, 2014.
"We had expected the quarter to be soft since orders had slowed in the latter half of 2013. However orders are picking up along with evidence that the overall market conditions have improved significantly as evidenced by the growth in our backlog," said Peter Bruijns, President & CEO. "Biorem experienced a technology challenge on one project which required a significant cost allocation to ensure technical performance and this substantially affected our gross margin. The margin reduction resulting from this allocation is not an indication that average margins are under pressure."
The Company succeeded in booking new orders totalling $3.8 million in the Quarter which resulted in an order backlog at the end of June 2014 of $9.7 million.