Pure Technologies Announces 2013 Year End Results
CALGARY, March 13, 2014 /CNW/ - Pure Technologies Ltd. ("Pure" or the "Company") (TSX: PUR) announces its financial performance for the year ended December 31, 2013.
- Revenue: $60.9 million, up 5%; up 29% excluding 2012 deferred equipment shipment
- EBITDA: $12.9 million, down 4%; up 142% excluding 2012 deferred equipment shipment
- Profit: $2.1 million for 2013 compared to $5.4 million last year
- 2013 impacted by a goodwill impairment loss ($1.7 million) related to a prior acquisition
- 2012 benefited from the recognition of $2.0 million in tax credits compared to $0.6 million recognized in 2013
- Gross margin: 78%
- Backlog: over $50 million
- Cash on hand: $41.4 million with no debt
"2013 was a year of great progress for Pure," said Jamie Paulson, Chairman of Pure. "On an adjusted basis, revenue improved by approximately 30% and EBITDA increased by more than 140% over the previous year reflecting significant growth in our key Americas market. Gross margin and EBITDA margin continued to be strong, at 78% and 21% respectively. Ongoing technology enhancements have dramatically expanded the capabilities of our service offerings outside our core concrete pipe market. For example, Pure inspected over 7,000 kilometres of oil pipeline in 2013, more than doubling the distance inspected and revenue generated compared to 2012. Business development efforts will accelerate this year to ensure continued growth in this sector and in our main water and wastewater sectors. We are fortunate to have a strong, debt-free balance sheet providing us with substantial flexibility in our capital allocation decisions. With 2013 and its many achievements behind us, I am looking forward to this year, 2014, with more optimism than at any time in the Company's history."
Table of Selected Financial Results:
For further details on the results, please refer to Pure's Management Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company's website (www.puretechltd.com).
unless otherwise indicated
and per share amounts)
|Cost of sales||3,730||3,044||686||23||13,387||12,802||585||5|
|Gross margin (%)||78||80||78||78|
|Profit (loss) for the period||1,812||5,081||(3,269)||(64)||2,080||5,456||(3,376)||(62)|
|Per share - basic||0.04||0.10||0.04||0.11|
|Per share - diluted||0.04||0.10||0.04||0.11|
|Per share - adjusted*||0.05||0.09||0.11||0.14|
*tax effected earnings per share adjusted for the effects of acquisitions and any non-recurring, extraordinary items.
Three months ended December 31, 2013
- Total revenues increased 14% quarter-over-quarter to $17.2 million. The majority of the increase is from Equipment sales (25% of total) and Inspection services (55% of total), both up 73% and 6%, respectively.
- Total operating expenses were consistent with the Company's overall expansion and growth within its core markets. The majority of the quarter-over-quarter increase reflects adjustments in 2012 for year-end performance-based incentive accruals.
- EBITDA of $4.3 million compared to $5.2 million last year, and profit of $1.8 million compared to profit of $5.1 million in 2012.
- Profit for the quarter was impacted by a goodwill impairment loss ($1.7 million) resulting from a downward price adjustment under the terms of an earn-out agreement for a prior acquisition. A gain in finance income was recorded in 2012 and 2013, offsetting the impairment recognized in the current period.
- Working capital at December 31, 2013 was $75.2 million compared to $70.4 million last year.
- Includes $41.4 million in cash.
Twelve months ended December 31, 2013
- Total revenues increased by 5% over the comparative period to $60.9 million. The comparative period was positively impacted by a deferred equipment shipment (worth $10.7 million); removing this impact, total revenues improved by 29%.
- Equipment sales (20% of total) decreased by 38% reflecting the prior period equipment shipment.
- Inspection services (57% of total) increased by 31% due to increased work mostly within the Americas.
- Consulting revenue (13% of total) increased by 22% due to new work and customers added by Pure Engineering Services.
- Monitoring and technical support revenue (10% of total) grew by 11%, reflecting new monitoring systems in the Americas and renewals of existing contracts.
- Total operating expenses increased 3% over the comparative period to $41.8 million.
- Marketing expenses (25% of total) increased by 22% due to business development activities internationally and additional personnel in the Americas.
- Engineering and operations expenses (42% of total) increased by 19% corresponding to the overall growth in revenue and from recruiting efforts.
- General and administrative expenses (30% of total) declined by 8%, related to the net impact of foreign exchange fluctuations.
- Research and development expenses (3% of total) have declined 65% related to the capitalization of costs.
- EBITDA of $12.9 million compared to $13.4 million last year, and profit of $2.1 million compared to profit of $5.4 million in 2012.
- Profit for the year was impacted by a goodwill impairment loss ($1.7 million) resulting from a downward price adjustment under the terms of an earn-out agreement for a prior acquisition. A gain in finance income was recorded in 2012 and 2013, offsetting the impairment recognized in the current period.
- 2012 profit benefited from the recognition of $2.0 million of Scientific Research & Experimental Development Input Tax Credits compared to $629,000 recognized in 2013.
Business, Operations & Outlook
The Americas region continues to be the main driver for revenue and earnings. Key long-term clients are leading the charge in the deployment of condition-based asset management strategies for critical pipeline infrastructure, and their success is causing a number of water and wastewater agencies to follow suit. The Company is expected to be a major beneficiary of this trend. Current total backlog remains strong at over $50 million.
The Company inspected over 7,000 km of oil pipeline with its SmartBall® leak detection technology in 2013 and generated almost $4 million in services and licensing revenue. This is compared to 3,100 km inspected and $1.6 million in revenue last year. Pure is looking to increase its business development efforts to sustain and accelerate growth in this sector.
Continued investment in Research & Development and the expansion of Pure's services' business remains a key component in its long-term growth strategy. These efforts will help to ensure continuing growth in the large metallic pipe sector which is a market 20 times larger than that of the large-diameter, concrete pipe market where Pure has historically generated the majority of its revenue.
International markets are still in the early stages of development; nevertheless, 16% of 2013 revenue was generated from countries outside of North America. Pure continues to pursue high-value opportunities in South America, the Middle East, South Africa, Asia and Australasia.
During the year, Pure acquired exclusive world-wide rights (excluding South Africa and Western Europe) to a suite of software solutions (branded as PureNet) that enables unique, cost-effective water network assessment, optimization and management. The Company is actively reviewing strategies for introducing its solutions to the small and medium-sized water utilities in North America and utilities in developing countries. This initiative is expected to grow Pure's leadership position as a world-wide provider of inspection and condition assessment technologies and services, while also becoming a leader in the evolving network asset management and Smart Water Network concept that is attracting increasing attention from investors and from some of the world's largest companies.
A teleconference will be held to discuss these results on March 14, 2014, at 10:30 am ET. Presentation slides will be made available on the Company's website prior to the call.
Teleconference: The telephone numbers for the conference are toll-free 1-888-231-8191 (within North America) and 647-427-7450 (Local / International). Please provide the operator with the Conference Call ID or Topic when dialing in to the call.
- Conference ID: 32453520
- Topic: Pure Technologies Ltd., 2013 Year End Conference Call
- A replay will be available approximately two hours after the call and will be available for two weeks. Access the replay by calling 1-855-859-2056 (toll-free within North America) or 416-849-0833 (Local / International). Use the following Passcode followed by the number sign: 32453520
Webcast & Presentation Slides: Investors will be able to listen to the conference over the Internet as well as access presentation slides (in pdf format) to follow along during the call.
- Links to the webcast and presentation slides will be available approximately 30 minutes prior to the call at: http://puretechltd.com/investors/presentations.shtml
- The webcast will be archived for 90 days.
About Pure Technologies Ltd.
Pure Technologies Ltd. is an international asset management technology and services company which has developed patented technologies for inspection, monitoring and management of critical infrastructure around the world. Pure's business model incorporates four distinct but complementary business streams:
- Sales of proprietary monitoring technologies for pipelines, bridges and structures (SoundPrint®, SoundPrint® AFO);
- Recurring revenue from data analysis and site maintenance for these technologies, and from technology licensing;
- Premium technical services including pipeline inspection, leak detection and condition assessment (PureEM™, SmartBall®, Sahara®, PipeDiver®, PureRobotics™, PureMFL™);
- Specialized engineering services in areas related to asset management, primarily in the area of pipeline condition assessment for water and wastewater infrastructure.
This release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words "believes", "expects", "anticipates", "estimates", "intends", "plans", or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and the Company's actual results could differ materially from those anticipated. Forward-looking statements are based on the opinions and estimates of Management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in, the Company's filings with Securities Regulators (www.sedar.com).
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To find out more about Pure Technologies Ltd. (TSX: PUR), visit our website at www.puretechltd.com. Or contact James E. Paulson, Chairman, Karen Keebler, Chief Financial Officer or Paul Moon, Investor Relations at (403) 266-6794 or e-mail to firstname.lastname@example.org.