TIDMHAL TIDMHALO
RNS Number : 8968W
HaloSource Inc
07 February 2012
FOR IMMEDIATE RELEASE 7 FEBRUARY 2012
This press release contains certain forward-looking statements
with respect to the operations, performance and financial condition
of the Company. By their nature, these statements involve
uncertainty since future events and circumstances can cause results
and developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information
available at the date of preparation of this press release and the
Company undertakes no obligation to update these forward-looking
statements. Nothing in this press release should be construed as a
profit forecast.
HaloSource, Inc.
Trading UPDATE
Seattle, U.S.A. - HaloSource, Inc. ("HaloSource" or "the
Company") (HAL.LN, HALO.LN), the clean water and antimicrobial
technology company, will announce its preliminary results for the
year ended 31 December 2011 on or around 13 March 2012.
The Board of the Company is taking this opportunity to provide
the market with an update of activity through the second half of
2011 and give some perspective on the preliminary outlook for
2012.
Highlights
-- Revenue for the full year ended 31 December 2011 is expected
to be $12.0 million, in line with market expectations announced in
October 2011. Cash and cash equivalents were approximately $13.4
million at the year-end. The Company is expected to have adequate
capital reserves to fund its 2012 plan.
-- As announced on 21 October 2011, the Company appointed Martin
Coles as its new President and CEO. Martin brings a wealth of
knowledge and experience in consumer marketing, sales and
operations both internationally and domestically with over 33 years
at some of the world's most recognized brands including Procter
& Gamble, PepsiCo, Nike, Reebok and most recently as President
of Starbucks Coffee International. Following a strategic review by
the new CEO, several key initiatives have been identified and are
now being executed to drive growth in 2012, including:
o Cultivating deeper strategic relationships with a select few
industry players across the segments of the business.
o Focusing on core competencies while eliminating
distractions
o Building brand awareness with a relentless focus on technology
innovation.
-- The Company has worked closely with Bajaj, its exclusive
distributor of the Company's Waterbird water purification device in
India, to implement several product enhancements together with
revamped packaging and key design improvements which management
believes will drive growing unit sales through the Bajaj
distribution channel during the upcoming 2012 monsoon season.
-- New HaloPure customers added during the second half of 2011,
and joint development agreements ("JDA") signed with two
multi-national corporations ("MNC") for potential product launches
in H2 2012.
-- Regulatory: China Ministry of Health ("MOH") approval for first HaloPure pitcher cartridge.
HaloSource's CEO, Martin Coles, commented :
"We are seeing a significant increase in partner interest in
adopting our innovative and protected technology, including by a
number of significant MNC's. These companies are targeting fast
growing water segments and need class leading and approved
technology to offer the highest performing solutions. Our
technology portfolio continues to be unmatched in breadth,
performance and regulatory approval and we will continue to focus
our attention on adding targeted and significant global partners in
2012, and beyond."
Strategic Initiatives
Martin and the leadership team have conducted a three-month
strategic review and have implemented a revised company strategy,
focusing on the Company's core expertise in technology and its
application for the needs of its global partners. The Company is
looking to build new customer relationships whilst enhancing
existing customer relationships in the Company's main markets of
US, India and China with companies such as Pool Corp., Bajaj and
Eureka Forbes. The Company's new strategy incorporates the
following core principles as key to driving growth:
-- Cultivating deeper more meaningful strategic relationships
with select industry players across all segments of the business
enabling the Company to expand its reach and application of its
innovative technologies (geography, product, and channel). Being
more open to structures that leverage core competencies of each
party.
-- Focusing on product innovation around the Company's core
technologies in its various segments.
-- Building brand awareness with a relentless focus on the end
user, understanding their needs and developing appropriate
solutions using the Company's unique technologies and approach.
-- Investing in our people to ensure we have the right talent in
the right places at the right time in line with our growth
ambitions, partnerships and key markets.
With these strategic initiatives now well into implementation,
the Company is focused on building a strong, sustainable and
rapidly growing global business where its core expertise in
technology and its application marries up with the strengths of its
global strategic partners.
In conjunction with the corporate strategy initiatives, the
Company has also taken steps to reduce all costs in the business.
To that end, the cash burn for the business dropped in excess of
30% in H2 2011 over H1 2011. This was driven by cost containment
across the entire organization and minimizing expenditures that are
unmatched with customer and revenue commitments. The cash position
of the Company is, and will continue to be, monitored closely
whilst the Company looks to execute its revised strategy throughout
2012, and beyond.
2011 Results
The Company had a difficult year of trading, with expected
revenue of approximately $12.0 million for the full year.
The Company expects the approximate breakdown of revenues for
the full year to be:
-- Water Clarification revenue of $10.0 million.
-- Water Purification (HaloPure drinking water) revenue of $1.4 million.
-- Antimicrobial Coatings revenue of $0.6 million.
Operational Review
The Company's water clarification unit was doubly impacted by
poor weather in the SeaKlear line of recreation water products and
lower overall construction activity in the HaloKlear line of
environmental water products. Management changes have been made in
both of these businesses and we believe these changes, combined
with a better macro environment, will lead to much improved
execution in 2012.
As previously reported, the Company's drinking water unit was
significantly impacted by manufacturing challenges associated with
its newly developed Waterbird household water purifier launched
with Bajaj in India. This delay ultimately resulted in a late
product launch missing most of the 2011 key monsoon season in
India, a very big driver of seasonal demand for water purifiers.
Over the past several months, the Company has worked closely with
Bajaj, to implement several product enhancements together with
revamped packaging and key design improvements. Management believes
these changes will drive unit sales through the Bajaj distribution
channel during the upcoming 2012 monsoon season. In addition,
during the fourth quarter the Company worked with Bajaj on a
program that placed Waterbird units in the field targeting an
encephalitis outbreak in Gorakhpur.
Other areas of commercial progress since the trading update
announced in October 2011 include:
-- Shipped first order of pitchers to a Major US OEM for retail distribution.
-- Orders commenced to a Malaysian-based RO partner.
-- Signed an agreement for Waterbird, UTC, and pitchers for
retail distribution in Africa, Middle East and Russia with Water
Applications Limited.
-- Signed a JDA for a second generation, air-to-water generator cartridge (current customer).
-- Orders commenced to a partner in Indonesia for HaloPure water pitchers.
-- Shipped the first Waterbird order for a trial targeting the
NGO category via our partner Del Agua.
-- Signed a JDA with a Latin American environmental water
distributor for the use of HaloKlear in treating environmentally
sensitive run-off associated with hydro-electric and dredging
projects. The Company shipped this partner product orders during
the fourth quarter of 2011 to support this project.
Subsequent progress in H1 2012 to date includes:
-- Signed a JDA with a second major MNC for the launch of a
low-cost water purification device powered by HaloPure targeting
the emerging markets for which unit sales may commence during H2
2012.
Regulatory progress since H1 2011 includes:
-- Received its first China MOH approval of a HaloPure powered
pitcher cartridge, a critical and major milestone for the
Company.
-- In Brazil, the Company overcame a technical hurdle related to
the test methodology of the national industry standards body. With
this achievement, the Company is hopeful this will pave a way for
realization of orders from its Brazilian partners.
The Company's out-licensing based HaloShield unit remains
primarily tied to its combined relationship with 1888 Mills and
Clorox. Management continues to believe that regulatory approval on
product claims is the key to growth in this segment, and this
effort continues with the US Environmental Protection Agency.
Outlook
Despite challenging trading conditions, management is confident
that under its new leadership, results will improve in 2012. This
will be driven by further implementation of our new strategic
framework, better execution with key partners and customers
including Bajaj, Eureka Forbes and meaningful engagement with
several newly signed partners in China, India, Brazil and the US.
As we begin 2012 we are already starting to see the desired results
of these efforts.
For further information:
HaloSource
Martin Coles, Chief Executive Officer +1 425 971 1975
James Thompson, Chief Financial Officer +1 425 974 1993
Buchanan
Charles Ryland/Suzanne Brocks/
Catherine Breen +44 207 466 5000
Liberum Capital (NOMAD)
Simon Atkinson/Richard Bootle +44 203 100 2222
Notes to Editors
About HaloSource
HaloSource is a clean water technology company, headquartered in
Seattle, U.S. with operations in India and China. It is focused on
the provision of cleaner, clearer and safer water using its
proprietary N-halamine bead technology to clean and purify water,
killing bacteria and viruses that may cause disease.
HaloPure provides safer drinking water and is considered a
unique contact biocide technology that is proven to attack and kill
a wide range of harmful micro-organisms and is approved for
long-term use in a variety of markets, including the United States.
In 2009, it became the first new drinking water technology company
in 30 years to be granted both Manufacture-For-Use and Device
registrations by the United States Environmental Protection Agency
("USEPA"). In 2010, HaloPure was the first new drinking water
technology ever to be approved by China Ministry of Health ("MOH").
Both US EPA and China MOH are both widely recognized as the world's
most stringent performance requirements for water purification, a
key differentiator for multi-national partners.
SeaKlear and StormKlear products use a second technology based
on natural bio-polymers to provide water clarification and
antimicrobial applications for treating recreational and
environmental water; and HaloShield facilitates the binding of
chlorine-based bleach to textiles such as sheets, lab coats and
towels. www.halosource.com
About HaloSource's Markets
HaloPure products are principally targeted at consumers in
emerging market countries, where access to safe drinking water is
particularly poor. In an independent analysis of the global Point
of Use drinking water device market carried out in 2005, Frost and
Sullivan concluded that:
-- the market for residential water treatment equipment in China
was estimated at $960 million in 2005, growing at an annual rate of
20.4% between 2004 and 2011;
-- the market for residential drinking water devices in India
was estimated at $425 million in 2009, and experiencing growth of
approximately 25% annually; and
-- in 2005 the global markets for filtration formats in the form
of under-the-sink, counter top and replacement cartridges were
growing annually at 20%, 21% and 18%, respectively.
The World Health Organization has estimated that 1.1 billion
people lack access to safe drinking water and the Centre for
Disease Control is recommending Point Of Use filtration and
disinfection.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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