TSX-V : HEO
Alternext : MNEMO : ALHEO
- Revenues of $8.3 million, down by
16.7% from $9.98 million for the same
period in fiscal year 2013.
- Gross profit increased at 25.8%, compared to 24.7% for the same
period in fiscal year 2013.
- Adjusted EBITDA1 at $69,670, compared to $726,693 for the same period in fiscal year
2013.
- Operating, selling and administrative expenses at 24.9% of
revenues, up compared to 18.4% for the same period in fiscal
2013.
- Net loss of ($469,994), down
compared to a net earnings of $269,696 for the same period in fiscal 2013.
- Operating activities generated $494,483 in net cash, compared to $1,210,214 for the same period in fiscal
2013.
All amounts in Canadian dollars unless otherwise
stated.
QUEBEC CITY,
Nov. 12, 2013 /CNW Telbec/ - (TSXV:
HEO) - H2O Innovation Inc.
("H2O Innovation" or the "Company") announces its
results for the first quarter of fiscal year 2014. During this
quarter, the Company's revenues decreased by 16.7% to $8.3 M, up from $9.98
M in the comparable quarter of the previous fiscal year -
generating a gross profit of 25.8% compared to 24.7% in the first
quarter of fiscal year 2013. The Company returned to positive
adjusted EBITDA this quarter after one quarter of negative adjusted
EBITDA for the fourth quarter ended June 30,
2013. "Throughout this fiscal year, we will continue to
strengthen the Company's business model established on the
combination of water treatment projects sales and recurring sales
of specialty chemicals and other consumables through the 2014
operating plan relying on three pillars: quality, innovation and
people", stated Frédéric Dugré, President and Chief Executive
Officer of H2O Innovation.
Revenues for the first quarter of fiscal year
2014 totaled $8.3 M, representing a
$1.7 M or 16.7% decrease, as compared
with revenues of $9.9 M for the same
quarter of fiscal year 2013. The decline is largely attributable to
revenues from projects which reached $5.1
M compared to $7.0 M in the
corresponding period of the previous fiscal year, representing a
27.5% decrease. The decline is partly attributable to the fact that
some of the Company's water treatment projects clients have delayed
the delivery or the commissioning of their systems, a situation the
Company cannot control. This situation has postponed to the second
half of fiscal year 2014 the revenue recognition of these projects.
In addition, more than half of last year's comparable quarter
revenues came from three (3) projects in the oil & gas sector
in Western Canada, which were of
bigger sizes than this quarter's projects. From time to time, the
nature of projects realized varies depending on the sales backlog
used.
The decrease of revenues has been softened by an
increase of revenues from sales of specialty chemicals and
consumables which reached $3.2 M in
this quarter compared with $2.9 M in
the comparable quarter of the previous fiscal year, representing a
9.2% increase. These revenues are recurring in nature. In the first
quarter of fiscal year 2014, we have added two new distributors to
our sales who will now represent PWT products and services in
Brazil and Tunisia. In addition, our efforts toward the
expansion of our distribution network for products related to maple
syrup production have contributed to nearly 60% of the increase of
our revenues from specialty chemicals and consumables during this
quarter.
In this first quarter of fiscal year 2014, the
Company was able to generate a 25.8% gross profit, up from 24.7% in
the first quarter of fiscal year 2013. The revenue mix in this
quarter shows that revenues from specialty chemicals and
consumables represent a higher proportion of total revenues
compared to the corresponding period of the previous fiscal year
(38.6% in fiscal year 2014 versus 29.4% in fiscal year 2013).
|
|
CONSOLIDATED RESULTS
Selected financial data |
Three-month period
ended on September 30,
(Unaudited) |
|
2013 |
2012 |
|
$ |
$ |
Revenues |
8,311,219 |
9,982,894 |
Gross profit |
2,141 991 |
2,462,571 |
Gross profit |
25.8% |
24.7% |
Operating expenses |
182,586 |
135,772 |
Selling expenses |
966,669 |
843,154 |
Administrative expenses |
919,063 |
863,263 |
Research and development expenses -
net |
43,407 |
- |
Net earnings (loss) |
(469,994) |
269,696 |
Basic and diluted earnings (loss) per
share |
(0.008) |
0.004 |
Adjusted EBITDA |
69,670 |
726,693 |
The Company secured $3.4
M in new bookings for water treatment projects over the
quarter. These new bookings, combined with the realized revenues
from water treatment projects during the quarter, have brought down
the backlog at $12.4 M as at
September 30, 2013. The Company's
bookings over revenue ratio for projects have declined to 0.7 from
1.1 in the previous quarter. The current pipeline is still rich in
opportunities which should allow the Company's sales backlog to
support its revenue growth. We maintain strong bidding activities
and management efforts are aimed at growing the Company's sales
backlog rapidly.
The Company's ratio of selling, operating and
administrative expenses ("SG&A") as a whole over revenues
amounted to 24.9% for this quarter, up from 18.4% for the
corresponding quarter of the previous fiscal year. This increase is
largely attributable to the decline in volume of water treatment
projects business due to some clients-related delays and due to a
higher level of SG&A expenses.
"We have begun this fiscal year by streamlining
our research and development activities into a more structured
model to ensure that the objectives included in our 2014 operating
plan relying on three pillars: Quality, Innovation and People are
met" added Frédéric Dugré. Therefore, a new function has
been identified in the Company's statement of earnings to reflect
the decisions made in this plan in regards to innovation. Research
and development expenses, net, totaled $43,407 for the current quarter.
Adjusted EBITDA for the quarter was recorded at
$69,670, compared with $726,693 for the same period ended September 30, 2012. The lower revenues recorded
during the quarter compared with the corresponding quarter of the
previous fiscal year and the higher SG&A expenses also
contributed to generating negative adjusted EBITDA. The Company
returned to positive adjusted EBITDA this quarter after one quarter
of negative adjusted EBITDA for the fourth quarter ended
June 30, 2013.
The net earnings (loss) was ($469,994 or ($0.008) per share for the first quarter of
fiscal 2013 compared with $269,696 or
$0.004 per share for the first
quarter of fiscal 2013. This deterioration is primarily due to
lower revenues despite generating a higher gross profit of 25.2%
and to higher SG&A expenses.
Operating activities generated $494,483 in cash for the period ended
September 30, 2013, compared with
$1,210,214 of cash generated during
the corresponding period ended September 30,
2012. The decline is mainly attributable to the degradation
in net loss in the first quarter of fiscal year 2014 as compared
with the corresponding period ended September 30, 2012 and to the change in working
capital items.
The first quarter financial report is
available on www.h2oinnovation.com and on NYSE Euronext Alternext's
site. Additional information on the Company is also available on
SEDAR (www.sedar.com).
Prospective disclosures
Certain statements set forth in this press release regarding the
operations and the activities of H2O Innovation as
well as other communications by the Company to the public that
describe more generally management objectives, projections,
estimates, expectations or forecasts may constitute forward-looking
statements within the meaning of securities legislation.
Forward-looking statements concern analysis and other information
based on forecast future results, performance and achievements and
the estimate of amounts that cannot yet be determined.
Forward-looking statements include the use of words such as
"anticipate", "if", "believe", "continue", "could", "estimate",
"expect", "intend", "may", "plan", "potential", "predict",
"project", "should" or "will", and other similar expressions, as
well as those usually used in the future and the conditional,
notably regarding certain assumptions as to the success of a
venture. Those forward-looking statements, based on the current
expectations of management, involve a number of risks and
uncertainties, known and unknown, which may result in actual and
future results, performance and achievements of the Company to be
materially different than those indicated. Information about the
risk factors to which the Company is exposed is provided in the
Annual Information Form dated September 24,
2013 available on SEDAR (www.sedar.com). Unless required to
do so pursuant to applicable securities legislation,
H2O Innovation assumes no obligation to update or
revise forward-looking statements contained in this press release
or in other communications as a result of new information, future
events and other changes.
About
H2O Innovation
H2O Innovation designs and provides state-of-the-art,
custom-built, and integrated water treatment solutions based on
membrane filtration technology to municipal, energy & natural
resources end-users. H2O Innovation also provides a
complete line of specialty chemicals and consumables for membrane
filtration and reverse osmosis systems. For more, visit
www.h2oinnovation.com.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) nor the Alternext Exchange
accepts responsibility for the adequacy or accuracy of this
release.
________________________________________
1 The definition of adjusted earnings before interest,
tax depreciation and amortization (adjusted EBITDA) does not take
into account the Company's changes in fair value of contingent
considerations, impairment of intangible assets, impairment of
goodwill and share of (earnings) loss in a joint venture and
stock-based compensation costs. The definition of adjusted EBITDA
used by the Company may differ from those used by other
companies.
SOURCE H2O Innovation Inc.