Press release from CNW Group
Pure Technologies Announces Record First Quarter 2012 Financial Results
Thursday, May 10, 2012
Pure Technologies Announces Record First Quarter 2012 Financial Results16:00 EDT Thursday, May 10, 2012CALGARY, May 10, 2012 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR), a world leader in the development and application of technologies for inspection, monitoring and management of physical infrastructure, today reported record financial results for the three-month period ended March 31, 2012 and provided a business update. All figures are in Canadian dollars unless otherwise stated. For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).Table of Selected Financial Results:($000's unless otherwiseindicated)Three monthsended March 31, 2012Three monthsended March 31, 2011$ Change% ChangeRevenue20,0787,76612,312159%Cost of sales4,8743,1761,69853%Gross profit 15,2044,59010,614231%Gross margin (%)75.7%59.1% Operating Expenses10,31711,120(803)(7)%EBITDA6,895(4,542)11,437252%Profit (loss) for the period3,201(4,998)8,199164% Per share - basic0.06(0.11) Per share - diluted0.06(0.11) Total assets119,420 99,41220,00820%"What a difference a year has made for Pure," said Jamie Paulson, Pure's Chairman. "We have come full circle with respect to our Libya operations and stand poised to generate healthy revenues in other key regions based on our successful track record and diversification efforts. Following a significant payment by the Man-Made River Authority in Libya before the end of the quarter, we shipped additional monitoring equipment which provided a boost to our most recent results. This, however, should not overshadow the overall performance achieved as well as the large amount of new work we secured in the first quarter. Total current backlog, which does not include recurring revenues from monitoring and technology licensing, is very robust at over $45 million - $29 million of this was added in the first quarter alone."Q1 2012 Financial Highlights:For the quarter, the Company recorded revenue of $20.1 million, EBITDA of $6.9 million and profit of $3.2 million. This compares to revenue of $7.8 million, negative EBITDA of $4.5 million and a loss of $5.0 million in the comparable period last year. The first quarter has been positively impacted by an equipment shipment worth $10.7 million made to the Man-Made River Authority ("MRA") under an existing 2010 contract; the Company has resumed activities in Libya based on a partial payment ($16 million) which constitutes 70% of outstanding receivables for previous equipment shipments under this contract.Total revenueswere $20.1 million compared to $7.8 million in the prior period, an increase of 159%.The increase in equipment sales (57% of total revenue) was largely responsible for the overall increase; excluding the Libya shipment, total revenues have increased 20% quarter-over-quarter.Inspection services (34% of total revenue), typically the largest proportion of total revenue, grew by 47% quarter-over-quarter.Total operating expensesfor the first quarter were $10.3 million compared to $11.1 million in same period last year, down 7%.The overall decrease is principally related to the decline in general and administrative expenses (36% of total expenses) which are down 31% quarter-over-quarter. The majority of the variance relates to economies of scale achieved from the integration of prior acquisitions. Additionally, the prior period included restructuring costs associated with the temporary halt in Libya operations.Engineering and operations (37% of total expenses) increased by 14% due to an acquisition made subsequent to the first quarter of 2011. Marketing expenses (18% of total expenses) increased 22% due to increased business development activities in international regions.Gross margins increased to 75.7% compared to 59.1% in the previous period.The first quarter of 2011 had a significantly lower margin due to an inventory write off for Libya and termination costs for contract personnel associated with the Libyan contracts. For 2011, the gross margin was 75.7% which is consistent with the first quarter of 2012.Working capital at March 31, 2012 was $67.0 million compared to $61.4 million in the prior period.Current assets include $29.6 million in cash and $36.0 million in accounts receivable. At March 31, 2012, a total of $15.6 million was outstanding from the MRA, which includes new receivables of $7.7 million from the latest equipment shipment.Q1 2012 Business and Operations Highlights:Total current backlog is more than $45 million, providing significant revenue and growth visibility. This does not include any potential new work from Libya and largely relates to new contracts in Canada and the United States. Recurring revenues from technology licensing, monitoring and site maintenance are also excluded from backlog.The Company has resumed normal operations in Libya based on an improved working environment and following receipt of a significant payment by its customer, the MRA.With the latest equipment shipment, Pure's technology can be deployed to cover up to another 600 km of pipeline, bringing the total length of monitored pipe to approximately 1,200 km; the MRA has over 4,000 km of pipeline within their network.Notwithstanding the recent equipment shipment to Libya, the Americas region historically contributes the largest proportion of total revenue; 40% of total revenue was captured by this region in the first quarter.The U.S. is the single largest contributor within this region, capturing 93% of the Americas revenue. In the first quarter, Pure completed over 100 miles of electromagnetic inspection of prestressed concrete cylinder pipe ("PCCP") - a company record within a three-month period - comprised of manned and free-swimming inspections utilizing its proprietary technologies.Pure announced a significant amount of new multi-year work worth over $29.1 million with existing customers in the U.S. and Canada.Awarded up to US$17.2 million in new work by the Washington Suburban Sanitary Commission, Laurel, MD. ("WSSC"). The award expands the duration and scope of an existing inspection and monitoring contract for critical water transmission mains. In addition, Pure was awarded a separate contract worth US$1.2 million by this same customer for the design, supply, installation and operation of an acoustic monitoring system for a PCCP network within a water treatment plant.Awarded a US$5.8 million multi-year contract to provide pipeline inspection and monitoring for Miami-Dade Water and Sewer Department. As in other programs, the inspection and monitoring services will utilize a range of Pure's patented technologies.Announced new, multi-year work with the City of Montreal worth up to $4.9 million. Under the contract, Pure will provide inspection, condition assessment, integrity monitoring and risk analysis services for a portion of the City's high-value and critical water mains which include approximately 40 km of PCCP.OutlookAfter 13 months of work disruption in Libya, Pure has resumed operations in the region based on an improved working environment and following receipt of a significant payment by the MRA, a valued customer since 2000. The Company will assist the MRA to determine the current condition of monitored pipe sections, equipment, and facilities that require repair as a result of political events. The payment of remaining outstanding receivables as well as a contract change order, which may include repair work and spare parts orders, is anticipated in 2012.Pure's specialized and experienced team leads the industry in the development of solutions to manage existing infrastructure as an alternative to the traditional approach of pipeline replacement or major rehabilitation. Using its successful "Assess and Address" framework, Pure's business development efforts continue in selective, high-growth international regions such as Asia, Australia, the Middle East and Africa. While work in North America will continue to be the main driver for Pure's future growth and revenue stability, the Company expects its international markets to deliver meaningful revenues moving forward as awareness and acceptance of its strategies and technologies becomes more widespread.Q1 2012 Conference CallA teleconference will be held to discuss these results on May 11, 2012, at 10:30 am ET. Presentation slides will be made available on the Company's website prior to the call.Teleconference: The telephone numbers for the conference are toll-free 1-888-231-8191 (within North America) and 647-427-7450 (Local / International). Please provide the operator with the Conference Call ID or Topic when dialing in to the call.Conference ID: 75018124Topic: Pure Technologies Ltd., First Quarter 2012 Results.A replay will be available approximately two hours after the call and will be available for one week. Access the replay by calling 1-855-859-2056 (toll-free within North America) or 416-849-0833 (Local / International). Use the following Passcode followed by the number sign: 75018124.Webcast & Presentation Slides: Investors will be able to listen to the conference over the Internet as well as access presentation slides (in pdf format) to follow along during the call.Links to the webcast and presentation slides will be available approximately 30 minutes prior to the call at: http://puretechltd.com/investors/presentations.shtmlThe webcast will be archived for 90 days.About 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). To find out more about Pure Technologies Ltd. (TSX: PUR), visit our website at www.puretechltd.com. Or contact James E. Paulson, Chairman, Karen Keebler, Chief Financial Officer or Paul Moon, Investor Relations at (403) 266-6794 or e-mail to firstname.lastname@example.org.® Registered Trademarks, property of Pure Technologies Ltd."The TSX 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, Karen Keebler, Chief Financial Officer or Paul Moon, Investor Relations at (403) 266-6794 or e-mail to email@example.com.