AAER releases 2009 second quarter results



    MONTREAL, Aug. 21 /CNW/ - AAER Inc. (TSX-V: AAE), ("AAER" or the
"Corporation"), Canada's only original equipment manufacturer of wind turbines
of 1 megawatt ("MW") and more, released today its financial results for the
three-month period ended June 30, 2009. The Company's unaudited interim
consolidated financial statements, Management Report and Annual Information
Form are available on the Company's Website at www.aaer.ca and on
www.sedar.com.

    Q2 2009 Highlights:

    
    -   Revenue in Q2 2009 totalled $1.5 million;

    -   Received a letter of intent from the Ministry of Economic
        Development, Innovation and Export trade for a 70% loan guarantee
        applicable to a line of credit, to a maximum of $50 million;

    -   Completed a share-for-debt offering totalling $1.5 million;

    -   Signed a conditional Turbine Supply Agreement (TSA) for the delivery
        and commissioning of 61 x 1.65 MW wind turbines to Mont Louis Wind
        L.P., represented by NPI Wind Power GP II Inc. and Northland Power
        Wind GP II Inc. ("Northland");

    -   Shipped two 1.5 MW wind turbines to Windland Inc. ("Windland") for
        their wind farm project in Tehachapi, California.;

    -   Raised gross proceeds of over $8.0 million through a public and a
        private offering of convertible unsecured subordinated debentures,
        common shares and common share purchase warrants;

    Subsequent to the end of Q2 2009:

    -   Signed an agreement for the delivery of a 1.65 MW wind turbine to
        Massachusetts Municipal Light Department Wind Energy Cooperative.
    

    "We continue to make solid progress with our core business development
initiatives. Our plant in Bromont is now fully operational with current annual
production capacity of 200 wind turbines; our procurement channels and supply
partners are well established; and our team is fully staffed, trained and well
prepared to ramp up production," said Dave Gagnon, President and Chief
Executive Officer of AAER. "AAER and Northland Power remain focused on
advancing the Mont Louis Wind L.P. project, with ongoing work on site
permitting, manufacturing specifications and other technical requirements. We
are also pleased to report continued expansion of our penetration into our
target markets, as subsequent to quarter end, we signed an agreement for the
delivery of a 1.65 MW wind turbine to Massachusetts Municipal Light Department
Wind Energy Cooperative. Looking ahead, we remain committed to our strategy of
establishing AAER as the leading supplier of wind turbines for projects of 50
MW or less. We believe we are uniquely positioned to exploit this valuable,
under-serviced niche market and believe that as the North American economy
begins its gradual recovery, our sales pipeline will continue to grow."

    Financial Results

    For the quarter ended June 30, 2009 (Q2 2009), sales totaled $1.5 million
compared to nil for the corresponding period last year. The revenue relates to
the delivery of turbine components to Hyundai Heavy Industries Co., Ltd.
    Net loss increased by $0.9 million in Q2 2009, to $4.3 million compared
to $3.4 million in 2008. On a per share basis, net loss in Q2 2009 was $0.03
compared to $0.04 for the same period last year. Decrease in net loss is
primarily driven by the increase in number of shares outstanding due to the
December 2008 and May 2009 public offerings.
    AAER's operating expenses for Q2 2009 totaled $3.4 million compared to
nil for Q2 2008, reflecting the production costs associated with the wind
turbine components delivered to Hyundai Heavy Industries Co., Ltd.; indirect
costs of the Bromont facility; and indirect production salaries which were
necessary to continue the implementation and the development of AAER's
operational strategy.
    Given that the Company continues to devote significant effort to its
growth, changes in the level of these expenses do not necessarily indicate
trends, demand, important events or uncertainties.

    Corporate Reorganization

    In the second quarter of 2009, AAER completed a corporate reorganization
following the departure of Mr. Robert Guillemette, Chief Operating Officer
("COO"). The position of COO has been replaced with two newly created
positions with distinct responsibilities in the Engineering and Production
departments. In addition, Mr. Jean-Robert Pronovost, Chief Financial Officer
("CFO") left the Company to pursue other business opportunities. AAER has
taken the necessary steps to fill the position in the near future. In the
meantime, Mr. Jean-Pierre Fortier, currently Director of Financial Services
and Controller, is acting as Interim CFO until the position is filled.

    Capital & Liquidity

    As at June 30, 2009, AAER had 169.2 million common shares issued and
outstanding, and $0.7 million in cash and cash equivalents. As of December 31,
2008, the Company had 122.4 million shares issued and outstanding and cash and
cash equivalents totaling $2.6 million.
    Compared to Q1 2009, cash and cash equivalents increased by $0.4 million,
driven by: i) the completion of a private offering of 569 units (the "Units")
for total gross proceeds of $0.6 million. Each Unit consists of one
convertible unsecured subordinated debenture in the principal amount of $1,000
(each, a "Debenture"); ii) a public offering of 32,609,000 AAER units for
total gross proceeds of $7.5 million, each such unit consisting of one common
share in the share capital of AAER and one common share purchase warrant (the
"C.S. Unit"); and iii) a share-for-debt offering valued at $1.5 million in
which 6,556,533 AAER C.S. Units were issued to 15 suppliers and other business
partners in payment of products and services received by AAER. The proceeds
from these issues were mostly offset by the net loss for the period in an
amount of $4.3 million; the investment in capital assets totaling $0.7
million; and non-cash working capital components and others in an amount of
$2,5 million.

    
    About AAER Inc.
    ---------------
    
    AAER is a wind turbine manufacturer located in Bromont, Quebec that
manufactures and maintains high capacity 1 MW or more wind turbines
principally for the North American market. Its strategy is to progressively
build its products' components to provide a high level of reliability and
competitive pricing to its customers. AAER uses a portfolio of proven European
technologies to ensure the performance of its turbines in various wind
conditions and terrains. Its stock is listed on the TSX Venture Exchange
(TSX-V: AAE). Additional information is available on the Corporation's website
at www.aaer.ca.

    
    Forward-Looking Statements
    --------------------------
    
    This news release contains certain forward-looking statements or forward
looking-information. These forward looking statements are subject to a variety
of risks and uncertainties beyond the Corporation's ability to control or
predict which could cause actual events or results to differ materially from
those anticipated in such forward looking statements. Such risks and
uncertainties are disclosed under the heading "Risk Factors" in the
Corporation's Annual Information Form for the year ended December 31, 2008 and
dated March 26, 2009. Further, forward-looking information is in addition
based on various assumptions, including, without limitation, assumptions
about: (i) general business and economic conditions; (ii) selection of the
Corporation's client bids in different requests for proposals; (iii) the
availability of financing on reasonable terms; (iv) the availability of key
components for the assembly of wind turbines, (v) the costs of raw materials
and parts; (vi) the Corporation's ability to attract and retain skilled staff;
(vii) market competition; (viii) the technology offered by the Corporation's
competitors; (ix) the Corporation's ability to meet contractual obligations
and delivery dates; and (*) the Corporation's ongoing relations with employees
and with clients. Should one or more of these risks and uncertainties
materialize, or should the underlying assumption prove incorrect or different,
actual results may vary materially from those described in the forward-looking
statements. All forward looking statements speak only as of the date of this
news release. Accordingly, readers should not place undue reliance on
forward-looking statements.

    
    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
    

    %SEDAR: 00019641EF




For further information:

For further information: AAER Inc., Dave Gagnon, President, Telephone:
(450) 534-5155, www.aaer.ca; The Equicom Group Inc., Alice Dunning, Telephone:
(416) 815-0700 x255, adunning@equicomgroup.com

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