A 10-year-long legal battle has delivered a hit to Philom Bios’s profits for 2005.
The Saskatoon-based inoculant company last week reported net earnings for the year ending Sept. 30 of $716,000 or 21 cents per share, on sales of $14.4 million.
Those numbers would have been much higher if not for an unfavourable court judgment that could cost the company $1.3 million.
The company was ordered by an Alberta court to pay that amount to Dow AgroSciences Canada in a dispute over the disposition of expired product that Dow was distributing under contract with Philom Bios in the mid-1990s.
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In July, an Alberta Court of Queen’s Bench judge awarded Dow damages in the amount of $944,319, along with interest, calculated to be about $375,000, and court costs.
Philom Bios has appealed the judgment and if successful, the money could be recovered.
In the meantime, the company has included in its financial statement for 2004-05 an extraordinary cost item of $1.19 million, representing the costs of the judgment, less estimated tax recoveries of $560,000.
The company’s profit before the extraordinary item was $2.05 million, or 59 cents per share, the highest in company history.
The previous year, Philom Bios recorded net earnings of $1.4 million, or 43 cents per share, on sales of $12.1 million.
President and chief executive officer Calvin Sonntag said he was pleased with the company’s financial performance in 2005, saying it represents “significant progress” toward achieving long-term objectives.
Highlights of the year include:
- An increase of 19 percent in revenue and 21 percent in gross profit margin.
- The first-ever distribution to shareholders, a payment of 50 cents per share.
- The company acquired a 105,000 sq. foot product, laboratory and office facility.
- The company invested about $1.5 million in several projects, including new technology and an expanded sales force.
