H2O Innovation Announces its 2008-2009 Second Quarter Results: Sales Growth Continues and First Net Income
February 12 2009 - 3:05PM
Marketwired Canada
H2O Innovation Inc. (TSX VENTURE:HEO)(ALTERNEXT:MNEMO:ALHEO)
- Sales of $9,546,009, up from $1,876,157 in 2007-2008.
- Gross margin up to 25.6%, from 22.7% in 2007-2008.
- EBITDA increases to $1,206,766 compared to ($618,460) in 2007-2008.
- Net income of $727,148, compared to a net loss of $748,867 in 2007-2008.
- Operating activities generated $742,146 in cash for the period compared to a
$515,112 use of cash in 2007-2008.
H2O Innovation Inc. ("H2O Innovation" or the "Company") announces its second
quarter results for fiscal year 2008-2009. During this period, H2O Innovation
recorded strong sales growth-fueled by organic and acquisitions related
growth-and a net income of $727 148, a first in the Company's history.
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CONSOLIDATED RESULTS
(Unaudited)
Three-month period Six-month period ending
ending December 31 ending December 31
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2008 2007 2008 2007
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$CAD $CAD $CAD $CAD
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Sales 9,546,009 1,876,157 15,095,466 4,332,377
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Gross margin 2,441,668 426,660 3,794,594 923,673
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Gross margin 25.6% 22.7% 25.1% 21.3%
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EBITDA 1,206,766 (618,460) 1,236,693 (1,482,466)
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Net income (loss) for
the period and
comprehensive results 727,148 (748,867) 317,877 (1,726,675)
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Basic and diluted
net income (loss)
per share 0.015 (0.021) 0.007 (0.049)
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For the three-month period ended December 31, 2008, sales increased
significantly to reach $9,546,009 compared to $1,876,157 for the same
three-month period ended December 31, 2007. A 52.2% proportion of this increase
comes from organic growth; the remaining 47.8% is related to acquisitions. Gross
margin amounted to 25.6%, compared to a gross margin of 22.7% for the
corresponding quarter of the previous fiscal year, which represents a 13%
increase. EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) for the quarter was $1,206,766, compared to ($618,460) for the
same period ended December 31, 2007. During the quarter, H2O Innovation has
recorded a net income of $727,148 ($0.015 per share), compared to a net loss of
$748,867 ($0.021 per share) for the corresponding quarter of 2007-2008, a first
in the Company's history. The sales backlog stood at $26,504,877 as at December
31, 2008.
Before the change in operating working capital, operating activities generated
$742,146 in cash for the period ended December 31, 2008 compared to a $515,112
use of cash for the comparable period ended December 31, 2007.
For the six-month period ended December 31, 2008, sales reached $15,095,466
compared to $4,332,377 for the comparable six-month period ended December 31,
2007. Gross margin has also noticeably increased to 25.1% for the first six
months of 2008-2009, up from 21.3% for the corresponding six months of
2007-2008, representing a 17.8% increase. EBITDA for the six-month period ended
December 31, 2008 was $1,236,693, compared to a $1,482,466 loss before interest,
taxes, depreciation and amortization for the same period ended December 31,
2007. The Company recorded a net income of $317,877 ($0.007 per share) for the
first half of the 2008-2009 fiscal year, compared to a net loss of $1,726,675
($0.049 per share) for the same period in 2007-2008.
Before the change in operating working capital, operating activities generated
$780,811 in cash for the six-month period ended December 31, 2008 compared to a
$1,295,676 use of cash for the comparable period ended December 31, 2007.
"These are H2O Innovation's best ever results. They reflect the concerted
efforts of employees, management, and directors in implementing the Company's
strategic plan, as well as gains in operational efficiency. These results are
proof of the soundness of the Company's business plan and of the steps taken
throughout the years to diversify markets, applications and territories and
improve project execution processes" stated Frederic Dugre, President and CEO.
RECENT HIGHLIGHTS
Services and consumable products sales growth
Sales of services and consumable products (replacement parts, membranes,
cartridges, conditioners, cleaning products and services), which first increased
noticeably in the previous quarter, continued to trend upwards in the second
quarter, making a positive contribution to quarterly results. Sales of services
and consumable products, which are usually recurrent, progressed from $1,389,011
in the first quarter of this fiscal year to $1,793,617 in the second quarter.
Management intends to continue its efforts throughout the organization to ensure
that recurring sales make up a growing share of total sales and contribute to
increasing the gross margin.
Increased competitiveness
H2O Innovation continued to pursue the cost control efforts initiated in the
previous quarter in order to have an optimal cost structure that corresponds to
its needs and activity levels and allows it to be well positioned to face
increased competition and the anticipated slowdown in the global economy.
Management is aware of the challenges posed by current economic conditions and
intends to redouble its efforts to improve its competitiveness.
"H2O Innovation is more than ever emerging as a leading player in the water
treatment industry at a time when infrastructure investment is again becoming a
priority. With a balanced technology portfolio, acknowledged resources and
expertise, along with a solid presence in Canada and the United States, H2O
Innovation is well placed to meet its growth and profitability targets"
concluded Frederic Dugre.
The second quarter financial report is available on the Company's Website
(www.h2oinnovation.com) and on Alternext's site (www.alternext.fr). Additional
information on the Company is also available on SEDAR (www.sedar.com).
Conference call and webcast
H2O Innovation will hold a conference call at 10:00 A.M. EST, on Friday,
February 13, 2009 to review the financial results for the second quarter. The
call will begin by a short presentation by Management which will be followed by
a question period. Shareholders, analysts and institutional investors are
invited to participate. The numbers to dial for access are 514-861-1531 in the
Montreal area or the toll-free number 1-877-922-4773 in North America. Overseas
callers dial 001-514-861-1531 for access. Media representatives and other
interested parties may participate in listen only mode or may listen to the live
webcast of the call accessible through H2O Innovation's Website at
www.h2oinnovation.com. The webcast will remain available for replay on the
Company's website for 90 days in the Investors section.
Prospective disclosures
This press release may contain prospective disclosures representing current
expectations of H2O Innovation and are subject to certain risks and
uncertainties. For details of these risks and uncertainties please refer to the
Company's Annual Information Form dated September 26, 2008 available on SEDAR
(www.sedar.com). H2O Innovation rejects any obligation to revise or update the
prospective disclosures contained in this press release.
About H2O Innovation
Exclusively dedicated to water treatment, H2O Innovation is establishing itself
as a key player in sustainable development and the field of clean technologies.
H2O Innovation designs, develops, produces and integrates state-of-the-art water
treatment systems for the production of drinking water, the treatment of
wastewater and industrial processed water in the municipal, commercial,
pharmaceutical, industrial, mining and energy markets. H2O Innovation has over
100 employees and eight offices including two manufacturing and assembly plants
in Canada and the United States. Shares of H2O Innovation are listed on the TSX
Venture Exchange (HEO) as well as on the Alternext Exchange (MNEMO:ALHEO).
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