CNV Amex .40/.42....12m shares out....CVF Technologies....52WH .69/L .24
This is one of those that finished very strong year end and followed up with continued momentum 1st qtr...stock has excellent support here and should move higher based on fundamentals. 12-31-03 year end points to consider:
Biorem (69% owned) sales record $6.2m and net inc $1.33m. Installed $3m biofilter for customer in food processing industry and contracts have been initiated for 2nd system of same size for 2004. Two new sales managers hired to pursue municipal, agri-food, forest products, hydrocarbon and surface coating industries. What Biorem does:
Biorem Technologies Inc. aims to be the world leader in design and implementation of biofilter technology for air purification and odor removal. Biological air filters provide cost effective and reliable removal of water soluble contaminants from air streams. The main advantages of biofiltration are the low operating cost (low energy consumption) and ultimate degradation of the contaminant on site rather than simply a phase transfer requiring further destruction. Biofilters have been used successfully in diverse applications to control both odors and VOC (volatile organic compound) emission. New applications continue to be developed.
A patent application was filed in 2003 for an improvement to the long lasting and fast acting BIOSORBENS™ filter media. Continued research is aimed at improving performance of removal of low level complex organic compounds that continue to plague the industry. Programs are underway for further characterization of odor constituents and the removal efficiencies of target components. Strategic research collaboration has been initiated with leading universities in Canada and the US to broaden and accelerate the development of the empirical knowledge base of biofilter kinetics.
BIOREM has plans to expand geographically and to market applications in 2004. New international business was initiated in 2003 with an order for supply of a biofilter to Riyadh, Saudi Arabia. Several other projects in Saudi Arabia are being advanced. Other international opportunities will be explored in 2004 and a strategic, multi year program will be developed.
Gemprint (65% owned)-what they do:
Gemprint makes, markets and services the only economically viable, fool-proof system in the world that uniquely identifies diamonds and other precious gems. Recently, Gemprint's technology has been adopted by a number of jewelry manufacturers and wholesalers for use in inventory control and security.
This provides evidence of ownership, which can assist in the recovery of lost or stolen gems or diamonds. This patented system, using a low power laser imaging system, is used by consumer and retail jewelry industry to provide a non-invasive Gemprint, or legal identifier that is recognized by the FBI and other law enforcement agencies as proof of ownership. In addition, embedded in the system is appraisal software that assists jewelers in the valuation of gems.
Today, over 20 insurance companies offer a 10% discount on diamond insurance policies if a gem is identified by the Gemprint process. CVF currently owns 67% of Gemprint.
Gemprint's sales increased by $98,799 (16%) compared to 2002 due to increased GEMPRINT™ registrations by new customers and also due to the selling, beginning in 2003, of a more sophisticated system for verification of memo goods at a selling price of $30,000.
SRE Controls (37% owned)-what they do-SRE is a maker and marketer of high efficiency, microprocessor-based electronic motor speed control products for direct current motors, primarily for battery powered vehicles such as electric fork lift trucks and various other industrial and leisure-time applications.
Use of SRE products result in higher energy efficiency and reduced maintenance which provides reasonable cost savings in terms of less engine wear and need for fewer trucks in a given fleet. SRE's proprietary technology is represented by several international patents.
SRE's sales decreased in 2003 by $752,250 (33%). Prior to April 1, 2002, the company was required to supply machine parts (at no mark-up)
and the SRE manufactured controller with mark-up under this arrangement with an OEM manufacturer. The agreement with the OEM was amended at the beginning of the 2002 second quarter, such that SRE was no longer required to supply the machine parts but continued to supply the manufactured controller. As a result of this change in the business arrangement, CVF no longer recorded the value of the machine parts in its sales or cost of sales. Had this arrangement changed at the beginning of the 2002 first quarter, the Company's sales and cost of sales for the 2002 quarter would each have been $1,321,935 lower than the reported amount. (or SRE's sales would be $584,581 or 62% higher in 2003 compared to 2002). The change in this arrangement has had no effect on the Company's gross margin dollars.
Ecoval (85% owned)-what they do-Ecoval has made significant steps forward in marketing its brand of 100% natural, environmentally safe fertilizers, a patented non-toxic organic herbicide and patented tree recovery systems.
The Nature's Glory line of products addresses the growing environmental and personal health issues concerning chemicals with products that provide better results than chemical products and stimulates soil activity, yet is price competitive.
Customers include major retail chains, municipalities, professional lawn care and landscaping contractors and golf courses.
Ecoval's sales decreased by $41,509 (13%) as fertilizer orders from some customers were not received and shipments of fertilizer in the second half of 2003 to U.S. customers were halted due to concerns related to mad cow disease.
PetroZyme (51% owned)-what they do-Petrozyme Technologies Inc. is an early-stage company that boasts a unique proprietary fermentation technology for the safe on-line remediation of sludge from treatment streams at oil refineries and chemical plants. Petrozyme has applied for its first process patent and currently is engaged in a major project at a refinery in Venezuela.
Founded by Dr. Owen Ward, Petrozyme is the first company to develop on-line technology for oil refineries and chemical plants that converts toxic bio-products to water and C02. CVF owns 51% of Petrozyme.
2003 Year End results:
Sales for 2003 were $8,704,069 or an increase of 47% compared to sales of $5,923,513 for 2002. This increase was principally due to the sales increase at Biorem of 128%.
The company reported an 18% reduction in its net loss from continuing operations (excluding expense related to stock options) to $1,790,916 ($0.20 per share) for the fiscal year 2003 compared to a net loss from continuing operations of $2,184,115 ($0.24 per share loss) in the fiscal year 2002.
CVF's gross margins increased to 41.1% in 2003 from 34.9% in 2002 as a result of increased margins at SRE Controls.
1st qtr 3-31-2004:
CVF Technologies Corporation Reports Profitability on 51% Increase in Sales in the First Quarter 2004
Monday May 24, 2:00 pm ET
WILLIAMSVILLE, N.Y., May 24 /PRNewswire-FirstCall/ -- CVF Technologies Corporation (Amex: CNV - News) today reported a sales increase of $794,400 or 51% for the first quarter 2004 compared to the first quarter 2003. Net income of $246,400 was reported for the first quarter of 2004 compared to a loss of $628,700 for the first quarter 2003. On a per share basis the income per share of $0.02 per share in the first quarter 2004 compared to a loss of $0.07 per share in the first quarter 2003.
Sales for the quarter ended March 31, 2004 were $2,353,200 or an increase of $794,400 (51%) compared to sales of $1,558,900 for 2003 comparable period due principally to an increase in Biorem sales of $743,200.
Biorem had sales of $1,668,100 during the first quarter 2004 which was an increase of $743,200 (80%) over the first quarter 2003. Also the company generated profit before tax of $230,600 compared to profit of $200,100 in the first quarter 2003.
As discussed in our 10KSB press release, we are working towards producing a net asset value per share calculation to assist investors in valuing CVF. Early indications are that this value is approximately $0.85 per share, demonstrating the undervalued share price that CVF is currently experiencing. A final value will be determined by an independent appraisal of CVF's portfolio companies in the near future. We expect the net asset value of CVF to keep increasing in the coming months and years as the portfolio matures, including increased values through potential IPO's and/or acquisitions of some of CVF's portfolio companies.
Management's analysis of cash resources was included in the December 31, 2003, 10KSB as filed on April 2, 2004. Management continues to carefully monitor and manage the company's liquidity and believes that the analysis included in the 10KSB is a reasonable indication of anticipated overall cash flows. The Company intends to mitigate the net cash outflow by seeking financing for CVF at the parent level, or by selling a portion of its holdings in certain investee companies, as indicated in prior filings. It will also continue to increase profitability or reduce the losses in its portfolio companies as well as seek third party financing for them, thereby reducing the cash requirements of CVF to fund them. This has already been demonstrated in the results of the first quarter.
RECENT ACHIEVEMENTS OF PORTFOLIO COMPANIES
Biorem - (69% owned by CVF) sales are up 80% in the first quarter and the company continues to be profitable. Major contracts recently achieved for its biofilters, to be used in municipal sewage treatment plants and food processing plants, include a $2.7 million food processing plant in Ontario, Canada. Biorem's current order backlog is approximately $6 million and has approximately $150 million of qualified leads that it is targeting. Biorem estimates that there are over 6,000 municipal sewage treatment plants in the US that can be target customers for its biofilters. These filters are used primarily for odor control.
Gemprint(TM) - (65% owned by CVF) continues to expand its market penetration in New York having sold Gemprint machines to several major diamond wholesalers, taking the company one step closer to becoming a world standard for diamond identification.
SRE Controls - (37% owned by CVF) is working to diversify its revenue into other markets and customers, as it launches its new line of electronic controllers in markets as diverse as off-road electric vehicles and electric motor scooters. It is also working to develop contracts with fuel cell and auto manufacturers.
Ecoval - (85% owned by CVF) is continuing to negotiate partnership agreements with major manufacturers and distributors in the U.S. and Canada, in order to launch a targeted marketing program for the sale, by all the major retail stores in the U.S. and Canada, of its natural non-toxic herbicides and insecticides. It is also continuing to seek agreements with distributors who focus on state and municipal governments, particularly in the area of mosquito control, which could help combat the spread of West Nile Virus.
Jeffrey Dreben, President and Chief Executive Officer, stated, "We are pleased with our 51% increase in sales as well as the achievement of profitability for the quarter. The 80% increase in profitable sales at Biorem is particularly satisfying. We are looking forward to continued progress in sales increases and profitability in the future quarters as well."
Summary-CVF is showing strong velocity in some of their subs, they are exploring ways to show unconsolidated financial results to better reflect underlying value of subs, they have a very nice set of patents both in hand and in process. Actual present value is at least double present price (that's low IMO) and it will continue to rise, as will the numbers based on strong statement from mgmt this past qtr. There are several variables here which could add considerable gusto ref the subs. To my mind a very easy call here at .42 |
