N-Viro International first-quarter net loss increases to $1.14M, or $0.22 per share

N-Viro International Corporation (OTC Bulletin Board: NVIC) ("N-Viro"), a leading-edge environmental biotech company that markets an alternative fuel technology and advanced fertilizer products, including the renewable biofuel N-Viro Fuel™ and N-Viro Soil™, announced that on May 17, 2010 it filed its Quarterly Report on Form 10-Q for the three months ended March 31, 2010.

Financial highlights for the quarter include:

• Revenues were $1.37 million, representing a 20% increase over fourth quarter 2009 revenues of $1.15 million and a 2% increase when compared to first quarter 2009 revenues of $1.35 million;
• Gross profit for the reporting period was $374,000, representing an 81% increase over fourth quarter 2009 reported as $207,000 and a 4% decrease when compared to $391,000 in the first quarter 2009;
• Gross profit margins for period were 27%, an improvement of 9% over fourth quarter 2009 and a decrease of 2% for the comparable first quarter 2009;
• Operating expenses reported as $1,521,000, an increase of $750,000 over fourth quarter 2009 and $1,164,000 as compared to the first quarter of 2009;
• Net loss increased to $1,143,000, or $0.22 per share for the quarter compared with a net loss of $544,000, or $0.11 per share for the fourth quarter ended 2009 and a net income of $20,000, or $0.00 per share for the same period one year ago;
• Non-GAAP adjusted cash earnings were $7,000 for the quarter compared with a loss of $59,000 for fourth quarter 2009, but a decrease from first quarter 2009 of $55,000.

Timothy Kasmoch, President and CEO of N-Viro said, "The quarterly improvement over the fourth quarter 2009 reflects our ongoing efforts focusing on operating efficiencies.  The result of this focus is demonstrated by a 9% sequential quarterly improvement in gross profit margins.  Due to unusual inclement weather patterns in our Florida market for the comparable 2010 and 2009 first quarter periods, revenues were flat, though on a sequential basis, I am pleased to report a 20% improvement when compared to fourth quarter 2009.  On an adjusted cash basis - adding back $1,117,000 of non-cash stock and options expense, $139,000 of amortization and depreciation expense and subtracting debt payments, we had $7,000 of cash-based earnings for the first quarter 2010 versus a $1,143,000 loss reported on a GAAP basis."

Operational highlights for the quarter include:

• Wet tons of biosolids processed in the first quarter 2010 increased 11% to 26,300 tons compared with 23,600 tons in the fourth quarter of 2009.  Compared to the first quarter of 2009, tonnage decreased by 1%.
• Ongoing discussions with international opportunities in South America.
• Secured short and long-term customer and supplier extensions in all markets.

Mr. Kasmoch continued: "Biosolids processing has remained consistent despite fluctuations related to economic stress and unusual weather patterns in our Florida market.  We continue to focus our energy and available capital towards the development of our N-Viro Fuel technology and anticipate continued progress in solidifying previously announced initiatives that will provide a supply chain of our fuel product by the end of 2010.  We are increasingly optimistic in our ability to reach this goal and look forward to the potential this technology offers."

SOURCE N-Viro International

www.nviro.com