TSX-V: HEO
Alternext: MNEMO: ALHEO
Results for the three-month period ended December 31, 2013
- Revenues of $8.8 million, down by
6.6% from $9.4 million for the same
period in fiscal year 2013.
- Gross profit stable at 26.2%, compared to 26.1% for the same
period in fiscal year 2013.
- Adjusted EBITDA1 at ($90,179), compared to $561,888 for the same period in fiscal year
2013.
- Operating, selling and administrative expenses up by
$380,000, at 25.9% of revenues,
compared to 20.1% for the same period in fiscal year 2013.
- Net loss of ($500,581), down
compared to a net earnings of $488,854 for the same period in fiscal year
2013.
- Operating activities used ($3,012,537) in net cash, compared to
$1,024,161 generated for the same
period in fiscal year 2013.
Results for the six-month period ended December 31, 2013
- Revenues of $17.1 M, down by
11.8% from $19.4 M for the same
six-month period in fiscal year 2013.
- Gross profit up at 26.0%, compared to 25.4% for the same
six-month period in fiscal year 2013.
- Adjusted EBITDA at ($20,509),
compared to $1,288,581 for the same
six-month period in fiscal year 2013.
- Operating, selling and administrative expenses up by
$606,000, at 25.4% of revenues,
compared to 19.3% for the same six-month period in fiscal year
2013.
- Net loss of ($970,575), down
compared to a net earnings of $758,550 for the same six-month period in fiscal
year 2013.
- Operating activities used ($2,517,833) in net cash, compared to
$2,234,375 generated for the same
six-month period in fiscal year 2013.
All amounts in Canadian dollars unless otherwise
stated.
QUEBEC CITY,
Feb. 12, 2014 /CNW Telbec/ - (TSXV:
HEO) - H2O Innovation Inc.
("H2O Innovation" or the "Company") announces its
results for the second quarter of fiscal year 2014 ended on
December 31, 2013. During this
quarter, the Company's revenues decreased by 6.6% to $8.8 M, down from $9.4
M in the comparable quarter of the previous fiscal year -
generating a stable gross profit of 26.2% compared to 26.1% in the
second quarter of fiscal year 2013. "This strong margin is the
result of our business mix, which allows the Company to cover an
important part of its fixed costs with its recurring revenues
coming from its specialty products, generally sold at higher
margin, even though the project business is lumpy. It is in the
continuation of that purpose that H2O Innovation
completed the acquisition of Piedmont in December", stated Frédéric
Dugré, President and Chief Executive Officer of
H2O Innovation.
The Company's revenues for the second quarter of
fiscal year 2014 totaled $8.8 M,
compared with $9.4 M in the
comparable quarter in fiscal year 2013. This decrease of
$0.6 M or 6.6% is largely
attributable to the low level of revenues from projects deliveries
and projects progress. These revenues reached $4.7 M for this quarter compared to $5.9 M in the comparable quarter of last fiscal
year. As mentioned in the first quarter of fiscal year 2014, 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.
However, revenues from sales of specialty
products and services are still progressing, reaching $4.1 M for this quarter compared with
$3.4 M in the comparable quarter of
fiscal year 2013. This 19.6% increase is the result of our
sustained efforts to: i) enlarge our specialty chemicals
distributors' network, ii) provide after sale services to our
systems' clients, iii) increase our market shares in Northeastern United States for equipment and
products sales of maple syrup production and iv) integrate in
December 2013 Piedmont's activities.
"The continuous growth of our recurring revenues contributes to
stabilize our business model, increases our gross profit and
preserves long-term relationships with our clients", added
Frédéric Dugré.
|
|
|
CONSOLIDATED RESULTS
Selected financial data |
Three-month
period
ended on December 31,
(Unaudited) |
Six-month period
ended
on December 31,
(Unaudited) |
|
2013 |
2012 |
2013 |
2012 |
|
$ |
$ |
$ |
$ |
Revenues |
8,797,428 |
9,418,908 |
17,108,647 |
19,401,802 |
Gross profit |
2,308,907 |
2,461,061 |
4,450,898 |
4,923,632 |
Gross profit |
26.2% |
26.1% |
26.0% |
25.4% |
Operating expenses |
218,644 |
139,369 |
401,230 |
275,141 |
Selling expenses |
951,242 |
904,630 |
1,917,911 |
1,747,784 |
Administrative expenses |
1,108,050 |
853,853 |
2,027,113 |
1,717,116 |
Research and development expenses - net |
104,044 |
- |
147,451 |
- |
Net earnings (loss) |
(500,581) |
488,854 |
(970,575) |
758,550 |
Basic and diluted earnings (loss) per share |
(0.006) |
0.008 |
(0.014) |
0.013 |
Adjusted EBITDA |
(90,179) |
561,888 |
(20,509) |
1,288,581 |
During the quarter, the Company added
$9.6 M in new bookings for water
treatment projects. These new bookings, coupled with the revenues
realized from water treatment projects during the quarter, have
brought up the backlog at $17.3 M as
at December 31, 2013, compared to
$18.7 M a year ago. This quarter's
new bookings include $6.1 M from the
energy sector. These new contracts are expected to be delivered
within the next 12 months. "A significant portion of these
contracts should be recognized as revenues during the current
fiscal year 2014 and shall allow the Company to reach a level of
revenues sufficient to generate profits in the next two quarters"
stated Frédéric Dugré.
The Company's ratio of selling, operating and
administrative expenses ("SG&A") as a whole over revenues
amounted to 25.9% for this quarter, up from 20.1% 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 to a
higher level of SG&A expenses. With the acquisition of
Piedmont, management aims to keep
the SG&A ratio to a level similar to last year through an
increase of revenues and tighter management of SG&A
expenses.
Adjusted EBITDA for the quarter was recorded at
($90,179), compared with $561,888 for the same period ended December 31, 2012. The lower revenues recorded
during the quarter compared with the corresponding quarter of the
previous fiscal year, combined with the significantly higher
SG&A expenses also contributed to generating a negative
adjusted EBITDA.
Operating activities used ($3,012,316) in cash for the period ended
December 31, 2013, compared with
$1,024,161 of cash generated during
the corresponding period ended December 31,
2012. The decrease is mainly attributable to the significant
decline in net loss in the second quarter of fiscal year 2014 as
compared with the net earnings in corresponding period ended
December 31, 2012 and to the negative
change in working capital items.
Over the six-month period ended December 31, 2013, the Company's revenues totaled
$17.1 M, compared to
$19.4 M for the corresponding
period ended December 31, 2012,
showing a decrease of 11.8%. During this same period the Company
recorded net loss amounting to ($970,575) and a negative adjusted EBITDA of
($20,509), compared to a net earnings
of $758,550 and a positive adjusted
EBITDA of $1,288,581 for the
corresponding period of fiscal year 2013. For the six-month period
ended December 31, 2013, the Company
used ($2,517,833) of cash flows from
its operating activities, compared to $2,234,375 generated by its operating activities
for the corresponding period of fiscal year 2013.
The second 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 provides integrated technological water
treatment solutions based on membrane filtration technology to
municipal, energy & mining end-users. H2O Innovation
designs state-of-the-art custom-built water treatment projects for
the production of drinking water and industrial process water, the
reclamation and reuse of water, and the treatment of wastewater.
Also, directly and through its affiliates, H2O
Innovation provides services and products complementary to its
membrane filtration and reverse osmosis systems. These products
consist of a complete line of specialty chemicals and consumables
and a complete line of couplings. 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, stock-based compensation costs, gain on settlement
agreement, and share of (earnings) loss in a joint venture. The
definition of adjusted EBITDA used by the Company may differ from
those used by other companies.
SOURCE H2O Innovation Inc.