MONTREAL, Dec. 11 /CNW/ - AAER Inc. (TSX-V: AAE), ("AAER" or the "Company"), Canada's only original equipment manufacturer of wind turbines of one megawatt ("MW") and more, released today its financial results for the three and nine month periods ended September 30, 2009. The Company's unaudited interim consolidated financial statements, Management Discussion and Analysis are available on the Company's Website at www.aaer.ca and on SEDAR at www.sedar.com.
In addition, the Company announced today that it has received approval for a $5.0 million loan from Investissement Québec. In connection with that loan, the Company also indicated that it has begun negotiation with an investment dealer, for the purpose of completing an equity offering by way of short form prospectus, for gross proceeds of at least $5 million.
Q3 2009 Highlights:
- Revenue in Q3 2009 totalled $5.4 million compared to $0.4 million for
the same period in 2008;
- Signed a US$2.6 million sales agreement for the delivery of a 1.65 MW
wind turbine to Massachusetts Municipal Light Department Wind Energy
Cooperative (referred to as "Templeton") in Baldwinville,
Massachusetts, USA; and
- Signed a US$2.7 million Reservation Agreement with Camelot Wind, LLC
in Plymouth, Massachusetts, USA for one 1.65 MW wind turbine;
- Signed a US$2.6 million sales agreement with the Town of Ipswich,
Massachusetts, USA for the delivery of a 1.65 MW wind turbine in the
first quarter of 2010;
- Signed a $3.3 million letter of intent with Leader Resources Services
Inc. in Tiverton, Ontario for the delivery of a 1.65 MW wind turbine;
- Announced the temporary layoff of 34 employees to preserve cash,
while servicing existing customers and proceeding with planning for
the manufacture and erection of new wind turbines currently under
- Completed a private offering of 250 units for gross proceeds of
- Obtained a waiver on interest payment due November 30, 2009 on the
December 17, 2008 convertible debentures as AAER was in default of
its covenants. The waiver will expire on January 29, 2010; and
- A Cease Trade Order on AAER's securities was issued on December 2,
2009 as the Company did not meet the November 27, 2009 deadline to
file its interim financial statements for the three month and nine
month periods ended September 30, 2009. Concurrently with the filing
of the financing documents for which the Company was in default, AAER
has filed an application with each applicable securities commission
to have the Cease Trade Order lifted.
"Despite a challenging credit and economic environment, that delayed the construction of wind energy projects in North America, we have been able to secure additional orders for wind turbines. We believe that this further confirms the market niche that AAER addresses," said Dave Gagnon, President and Chief Executive Officer of AAER. "We appreciate the support of the Government of Québec and look forward to working with our partners, in order to properly capitalize the Company and execute on our pipeline of opportunities," continued Mr. Gagnon.
Financial Highlights (in thousands of Canadian dollars unless otherwise indicated)
Sales amounted to $5,413, compared to $398 for the 2008 corresponding period, reflecting the delivery of two turbines for the Windland project.
Net loss increased by $1,489 in 2009, to $5,525 compared to $4,036 in 2008. This increase is primarily due to higher operating expenses for the production activities at the Bromont facility as well as project overruns in the delivery, installation and manufacturing of the Windland project wind turbines.
Cost of operations amounted to $7,993 compared to $514 in 2008. Cost of operations mainly includes the following:
- Cost of wind turbine components, penalty due to late delivery of
turbine components and cost overrun on installation and turbine
erection, all related to the Windland project.
- The indirect costs of the Bromont facility and indirect production
salaries which were necessary to continue the implementation and
development of AAER's operational strategy.
- In these unaudited interim consolidated financial statements, all
indirect expenses included in cost of operations in 2009, were
presented in SG&A in 2008, since the Corporation was still in the
development stage and the production facility was still under
SG&A expenses decreased by $1,672 in 2009, to $2,110 compared to $3,782 in 2008. This decrease is mainly due to:
- A decrease in SG&A salaries and benefits of $903 due to the transfer
of personnel to production activities.
- A reallocation of the Bromont facility's rent expense from SG&A to
cost of operations in the amount of $462 due to the square footage
utilization for production activities.
- A decrease in consulting and external services expenses of $467
versus the same period last year. In 2008, major efforts were
necessary to implement and develop the operational activities in a
short period of time and external consultants in engineering, legal
and audit were needed.
- An increase in other administrative expenses of $160.
- In 2009, most of the Corporation's resources are allocated to its
production activities and presented in cost of operations.
Given that the Corporation continues to devote significant efforts to its growth, changes in the level of these expenses do not necessarily indicate trends, important events or uncertainties.
Capital, Liquidity & Equity Offering
As at December 11, 2009, AAER had 169.2 million common shares, 101.2 million common share purchase warrants, and 6.1 million stock options issued and outstanding, and cash and cash equivalents drawn down to zero. As of December 31, 2008, the Company had 122.4 million shares issued and outstanding and cash and cash equivalents totaling $2.6 million.
On December 10, 2009, AAER received approval for a loan from Investissement Québec totaling $5.0 million to be disbursed in three installments, each subject to certain terms and conditions that are customary for this type of instrument. In parallel, the Company is negotiating with an investment dealer to complete an equity offering by way of short form prospectus, for gross proceeds of at least $5 million.
On October 2, 2009, AAER announced the closing of a private offering of convertible unsecured debentures and warrants for total gross proceeds of $250,000. For further information on this financing, readers are referred to AAER's press release dated October 2, 2009 available on SEDAR at www.sedar.com.
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.
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
SOURCE AAER INC.
For further information: For further information: AAER Inc.: Dave Gagnon, President, Telephone: (450) 534-5155, www.aaer.ca; Eric Phaneuf, Chief Financial Officer, Telephone: (450) 534-5155, email@example.com