BlueScout Technologies Reports Second Quarter Financial Results for 2012
CHANTILLY, VA, Aug. 28, 2012 /CNW/ - BlueScout Technologies TSXV: SCT, providers of the BlueScout OCS-210 for optimized wind energy generation, reported its financial results for the three-and six-month periods ended June 30, 2012. All figures are in U.S. dollars, unless otherwise stated.
"During the second quarter we surpassed 250,000 hours of field operation of our units on top of multiple top tier turbines," said Jo Major, President and CEO of BlueScout Technologies, Inc. "With reliability and up-time nearing 100% and approximately 35 installations completed or scheduled, we are providing our current and potential customers with a wealth of powerful data that is demonstrating the compelling capabilities of our product. We believe we are on the cusp of broad market acceptance. We were also successful in continuing to decrease our operational cost structure by diligently improving manufacturing and research and development efficiencies."
Selected Q2 2012 Financial and Operational Highlights
- Agreement with Availon GmbH signed providing sales representation, installation and maintenance services in the German market. This represents a significant opportunity to extend BlueScout's turbine control products into one of the top wind energy producing regions in Europe.
- Signed an agreement for a collaborative project with TechnoCentre éolien to install an OCS on one of its REpower MM92 2.05 MW wind turbines in Québec for evaluation in extremely cold climates and complex terrains.
- Continued to expand our patent portfolio with eight issued patents and 15 pending patent applications.
- Installation activities at four customers, covering five projects, including first-time installations at two customers.
- Upgraded product that had been installed at many customers prior to September 1, 2011 to improve customer experience.
- Jo Major appointed as full-time President and CEO, as part of a larger consulting agreement with InSite Partners, LLC, a firm specializing in corporate turnarounds and strategic transactions of technology companies.
Highlights Subsequent to Quarter-end
- Successfully rebranded under the name BlueScout Technologies, which included a new image, mission, vision, values, domain name and fresh logo. The new brand and its optical wind sensor, now known as the BlueScout OWS-150 and the OCS-210, are positioned to reconfirm the Company's commitment to making wind energy more competitive through innovation.
- On August 24, 2012, completed a special warrant offering for gross proceeds of CDN$3,064,000 and a convertible debt offering for CDN$1,200,000.
BlueScout recognized revenue of $260K for the quarter ended June 30, 2012, compared to nil for the three-month period ended June 30, 2011. Second quarter 2012 revenue was generated from two customers, one being a new customer. The Company has $758K of deferred revenue and customer deposits recorded on its consolidated balance sheet at June 30, 2012 related to product shipments that have performance provisions that are expected to be recognized in future quarters. The Company had $553K of deferred revenue and customer deposits, as at December 31, 2011.
On a six-month basis, BlueScout recognized revenue of $460K for 2012 compared to $390K for the same period in 2011. The Company's revenue for six-months ended June 30, 2012 was generated from three customers compared to two for the same period last year.
Operating expenses for Q2 2012 were $2.8M, up 20.4% from $2.3M for the corresponding period last year. Excluding the non-cash gain on the fair value of the warrant liability of $9.2K and $2.4M in Q2 2012 and Q2 2011, respectively, operating expenses decreased $2.0M or 41% for the quarter ended June 30, 2012 from the same quarter last year. Further, when excluding litigation related expenses of $725K, operating expenses for the quarter ending June 30, 2012 totaled $2.0M versus $4.7M for the quarter ending June 30, 2011, a decrease of $2.7M or 56%.
For the six-month period ended June 30, 2012, operating expenses were $4.8M, down 53% from $10.2M for FY2011. Excluding the non-cash gain/loss on the fair value of the warrant liability and litigation expenses, operating expenses were $4.1M, down 48% from $7.8M for the same period last year. Selected operating expenses are detailed below:
Cost of sales for the three-month period ended June 30, 2012 was $489K compared to $274K for the same period last year. On a six-month basis, cost of sales was $640K compared to $1.1M for the same period in 2011. Cost of sales include product unit cost and all costs associated with the installation on, and integration with, wind turbines.
General and administrative expense for Q2 2012 was $171K down 76.6% from $731K for Q2 2011. The decrease is primarily due to reductions in travel related expenses and repairs and maintenance costs. Travel related expenses comprised $52K of general and administrative expense for the quarter ended June 30, 2012 compared to $294K for the same period in 2011. Repairs and maintenance expense comprised $3K for the quarter ended June 30, 2012 as compared to $253K for the same quarter last year. On a six-month basis, general and administrative expense was $464K compared to $1.6M for the same period in 2011. The 2011 expenses were predominantly related to travel and maintenance related to the Falcon 50 aircraft.
Amortization of intangible assets for Q2 2012 was $879 compared to $339K for Q2 2011. The decrease is due to the fact that amortization last year included amortization related to the project development costs of an intangible asset, which was written off at September 30, 2011. For the first six months of 2012, amortization of intangible assets was $3K compared to $677K for the same period last year.
Professional fees totaled $942K for the three month period ended June 30, 2012, up 58.0% from $396K for the same period last year. The increase in professional fees for the quarter is due to legal expenses related to litigation matters. Legal expense was $789K for the second quarter of 2012 versus $119K for the same period last year. On a six-month basis professional fees were $1.4M for 2012 and $667K for 2011. Excluding litigation expenses, legal expenses in 2012 compared to 2011 declined by $55K and $111K for the corresponding three and six month periods.
Second quarter 2012 research and development expense was $124K compared to $1.8M for the same period last year. The development of the second generation Vindicator, inclusive of OADS labor, accounted for most of the $1.8M R&D expense in 2Q11. The second quarter of 2012, research and development expense was spent on contract manufacturing non-recurring expenses and control system design, evenly split. On a six-month basis, research and development expense was $181K compared to $3.3M for the same period in 2011.
BlueScout recorded a net loss for Q2 2012 of $2.5M or $0.02 per share, compared to a net loss of $2.2M or $0.03 per share for Q2 2011. On a six-month basis, BlueScout generated a net loss of $4.3M or $0.04 per share compared to a net loss of $9.6M or $0.12 per share for the same period of FY2011.
As of June 30, 2012, BlueScout had cash and cash equivalents of $1.5M and working capital of $2.0M, compared to cash and cash equivalents of $6.0M and working capital of $6.3M at December 31, 2011.
BlueScout has filed its financial statements for the three- and six-month period ended June 30, 2012 and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities. BlueScout's financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website, www.BlueScout.com.
BlueScout will hold a conference call on August 29, 2012 at 10:00 am ET to discuss its second quarter 2012 financial results.
To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. A question and answer session for analysts and institutional investors will follow management's presentation.
A live audio webcast of the conference call will be available at www.BlueScout.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above web site for 30 days.
A taped rebroadcast will be available to listeners until 12 a.m. ET on Wednesday, September 5, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 14916097, followed by the number sign.
BlueScout Technologies (TSXV: SCT) increases energy production and decreases operating costs by applying groundbreaking microgeographical wind flow sensing to turbine control systems that increases the effectiveness and availability of wind turbines. BlueScout combines precise, optically based wind forecasting with advanced predictive control architectures to ready the turbine for the imminent wind inflow changes - optimizing energy production and reducing the harmful effects of wind turbulence on the turbine. With extensive operating data on multiple wind turbine models, BlueScout is the leading, value-added innovator in wind turbine performance and optimization.
The team consists of experienced high-tech, R&D and manufacturing engineers, innovative entrepreneurs, and proven leaders. The BlueScout team has unique expertise and shares a firm commitment, as part of the wind power industry, to continuously improve the reliability of wind power generation through innovation. For more information, visit www.BlueScout.com.
This news release includes certain forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed in such forward-looking statements. Forward-looking statements in this news release, include, but are not limited to, economic performance and future plans and objectives of BlueScout Technologies. Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although BlueScout believes that the assumptions and factors used in making the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed timeframes or at all. BlueScout Technologies disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Catch the Wind Ltd.
Condensed Consolidated Interim Balance Sheets
|June 30,||December 31,|
|(Expressed in United States dollars)||Note||$||$|
|Cash and cash equivalents||1,449,547||6,018,559|
|Prepaid expenses and other assets||215,030||352,002|
|Property and equipment||286,084||418,896|
|Liabilities and Equity|
|Accounts payable and other liabilities||2,086,040||1,391,799|
|Obligations under finance leases||5||21,216||62,707|
|Due to related party||9||45,139||18,516|
|Deferred revenue and customer deposits||758,400||552,800|
|Obligations under finance leases||5||-||7,620|
|Provision for indemnification agreement||6||2,000,000||2,000,000|
|Due to related party||9||34,306||-|
|Commitments and contingencies||7,8|
|Total liabilities and equity||5,365,178||8,872,728|
Approved on behalf of the Board:
(signed) "Dr. Jo S. Major"
Chairman of the Board
(signed) "Susan Nickey"
Director and Audit Committee Chair
See accompanying notes to the unaudited condensed consolidated interim financial statements.
Catch the Wind Ltd.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
|Three months ended||Six months ended|
|June 30,||June 30,||June 30,||June 30,|
|(Expressed in United States dollars)||Note||$||$||$||$|
|Cost of sales||3||489,363||273,797||639,954||1,056,704|
|Salaries and benefits||4||552,063||429,718||1,318,662||1,082,027|
|General and administrative||171,110||731,288||463,741||1,584,502|
|Inventory writedown - beta units||3||-||(19,052)||571||7,948|
|Amortization of intangible assets||879||338,540||3,166||677,080|
|Depreciation of property and equipment||111,360||159,019||201,362||318,116|
|Sales and marketing||2||129,523||147,663||154,809||296,012|
|Professional engineering fees||75,410||191,995||229,333||480,731|
|Research and development||124,121||1,831,385||180,515||3,340,583|
|Other income, net||-||(17,749)||-||(17,749)|
|(Gain) Loss on fair value of warrant liability||10||(9,209)||(2,408,442)||(248,352)||251,886|
|Foreign exchange (gain) loss||914||205||89||7,075|
|Net loss and total comprehensive loss||(2,509,064)||(2,299,702)||(4,300,900)||(9,824,111)|
|Net loss and total comprehensive loss attributable to:|
|Owners of the Company||(2,509,064)||(2,185,797)||(4,300,900)||(9,594,776)|
|Net loss per share - basic and diluted||(0.02)||(0.03)||(0.04)||(0.12)|
|Weighted average number of common shares|
See accompanying notes to the unaudited condensed consolidated interim financial statements.
SOURCE: BlueScout TechnologiesFor further information:
BlueScout Technologies, Inc.
John E. Green
CFO & Treasurer
416-815-0700 ext. 253