Press release from CNW Group
PURE TECHNOLOGIES LTD. ANNOUNCES FIRST QUARTER 2011 RESULTS
Thursday, June 09, 2011
PURE TECHNOLOGIES LTD. ANNOUNCES FIRST QUARTER 2011 RESULTS15:47 EDT Thursday, June 09, 2011CALGARY, June 9, 2011 /CNW/ - Pure Technologies Ltd. ("Pure") (TSX: PUR) today announced its financial results for the three months ended March 31, 2011. This is the first reporting period for which the Company's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"); all comparative figures have been restated.Financial highlights for the quarter include:Revenue of $7.8 million, a 36% increase over $5.7 million for the first quarter of 2010. Revenue from inspection services increased by 403% over the first quarter of 2010 as the demand for condition assessment services, including robotic and PipeDiverTM inspections, continued to grow. Acquisitions accounted for $3.0 million, or 83% of the increase.An increase in net loss from $1.9 million in the first quarter of 2010 to $5.0 million in 2011, due to a revenue shortfall of approximately $11.5 million caused by the deferral of an equipment shipment to the Great Man-Made Project and interruption in service, combined with one-time restructuring costs related to the project.EBITDA loss of $4.5 million, compared to a loss of $1.3 million for the first quarter of 2010.Gross margin for the quarter of 59.1%, consistent with 2010. Excluding one-time costs associated with the Libya situation, gross margin was 65%.Loss per share of $0.11, on a fully diluted basis, compared to $0.05 for the first quarter of 2010.Other notable developments during the period include:The acquisition of the business and assets of the Inspection Division of Specialized Technical Services Est., an Abu Dhabi-based company involved in inspection and monitoring of water, wastewater and oil & gas pipelines. This acquisition is an important step in the development of Pure's business in the GCC region.The completion of numerous projects in Australia through Aqua Environmental Pty Ltd., including the first SmartBall® project with Sydney Water, the country's largest regional water authority. Aqua's existing services continue to be in demand and educational and marketing efforts are being undertaken to promote Pure's services in the region."Our first quarter results were severely affected by the political events in Libya. Also, business in the Americas got off to a slower than expected start due to contract timing issues; this is typical of the normal quarterly volatility we experience in our business and we expect that revenues will strengthen over the balance of the year. In spite of these issues, we were still able to grow revenues by 36% over last year due to strong growth in our technical services business" said Jamie Paulson, Chairman. "We successfully evacuated all of our expatriate personnel from Libya and we acted quickly and decisively to reduce costs related to the project following suspension of work. We are pleased to advise that we have recently received permits from the Canada's Minister of Foreign Affairs, pursuant to the Canada and United Nations Libya sanctions regulations, which allow us to receive payment of outstanding receivables related to the Great Man-Made River contract and to complete our contractual obligations on the project. Notwithstanding the granting of the permits we currently have no clear visibility on when payment will be received, although we have been advised by the management of the Great Man-Made River Authority that the completion of equipment deliveries and the resumption of the monitoring program is one of the top priorities for the agency. We are working closely with the Authority to resolve the payment issue."Looking ahead, our current confirmed backlog is in excess of $40.7 million, $10.7 million of which is attributable to the Libyan contract. Business activity in the Americas is very robust where we have doubled revenue growth in each of the last three years. We continue to invest in business development in high-growth overseas markets which we anticipate will generate commercial traction in the latter part of this year. For instance, Pure Technologies China Ltd., in which Pure has a 50% interest, was recently awarded its first commercial contracts in China, worth over $600,000, for an electromagnetic inspection of a prestressed concrete pipeline in Shanxi province, and SmartBall® inspections in Szechuan province and Macau," Mr. Paulson said.Subsequent events included graduating from the TSX Venture Exchange to the TSX, marking a significant milestone for Pure. The move is expected to provide higher visibility for Pure and increased liquidity for Pure's shareholders. Pure also completed a bought-deal, short-form prospectus offering of 3,922,000 common shares for total gross proceeds of approximately $20 million. These proceeds are intended to fund business objectives including the development of new technologies and further commercialization of existing technologies; increased marketing endeavors; and strategic acquisitions of assets and entities complementary to Pure's business and operations.2011 Ql Financial HighlightsCondensed Consolidated Statement of Comprehensive Income(unaudited) Three months ended March 31,2011 March 31,2010Revenue Equipment sales 735,000 1,720,000 Inspection services 4,593,000 914,000 Consulting services 1,685,000 1,686,000 Monitoring and technical support 752,000 1,406,000Total Revenue 7,765,000 5,726,000 Cost of sales 3,176,000 2,320,000 Marketing 1,572,000 1,301,000 Engineering and operations 3,285,000 1,400,000 General and administration 5,425,000 1,998,000 Research and development 838,000 625,000Results from operating activities (6,531,000) (1,918,000) Interest income 26,000 16,000 Loss before income taxes (6,505,000) (1,902,000) Income taxes (1,507,000) 8,000 Net loss for the period (4,998,000) (1,910,000) Other comprehensive income (loss) Foreign currency translation difference - foreign operations 105,000 (113,000)Other comprehensive income (loss) for the period 105,000 (113,000) Net loss and comprehensive income (loss) for the period (4,893,000) (2,023,000) Net loss per share - basic $ (0.11) $ (0.05) - diluted $ (0.11) $ (0.05) Condensed Consolidated Statement of Financial Position(unaudited) March 31 December 31 2011 2010Assets Current assets: Cash and cash equivalents 9,470,000 14,173,000Accounts receivable 39,249,000 41,394,000Inventory 6,804,000 4,313,000Prepaid expenses 958,000 1,203,000Net investment in lease 18,000 36,000 56,499,000 61,119,000Property and equipment 6,069,000 5,675,000Goodwill 23,340,000 22,125,000Intangible assets 10,752,000 11,466,000Deferred tax asset 2,752,000 1,251,000 99,412,000 101,636,000Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities 6,719,000 6,179,000Acquisition holdback payable 4,250,000 4,250,000Contingent consideration 903,000 147,000Deposits on sales contracts 3,811,000 3,546,000 15,683,000 14,122,000Contingent consideration 754,000 -Total liabilities 16,437,000 14,122,000Shareholders' equity: Share capital 91,443,000 91,360,000Contributed surplus 3,023,000 2,752,000Share Purchase Warrants 993,000 993,000Accumulated other comprehensive income 903,000 799,000Deficit (13,387,000) (8,390,000) 82,975,000 87,514,000 99,412,000 101,636,000About Pure Technologies Ltd.Pure Technologies Ltd. is an international asset management technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:Sales of proprietary monitoring technologies for pipelines, bridges and structures (SoundPrint®, SoundPrint® AFO);Recurring revenuefrom data analysis and site maintenance for these technologies, and from technology licensing;Premium technical servicesincluding inspection, leak detection and condition assessment (P-Wave®, SmartBall®, Sahara®, PipeDiver™, PureRobotics™);Specialized engineering servicesin areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure (Openaka Corp., Price Brothers (UK) Ltd, and Jason Consultants). Forward-Looking StatementsThis release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words "believes", "expects", "anticipates", "estimates", "intends", "plans", or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and the Company's actual results could differ materially from those anticipated. Forward-looking statements are based on the opinions and estimates of Management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in, the Company's filings with Securities Regulators (www.sedar.com). ® Registered Trademarks, property of Pure Technologies Ltd."The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release" For further information: To find out more about Pure Technologies Ltd. (TSX: PUR), visit our website at www.puretechltd.com. Or contact James E. Paulson, Chairman or Karen Keebler, Chief Financial Officer at (403) 266-6794 or e-mail to email@example.com.