TSX-V : HEO
Alternext : MNEMO : ALHEO
Revenues of $8.3 million, down by 16.7% from $9.98 million for the same
period in fiscal year 2013.
Gross profit increased at 25.8%, compared to 24.7% for the same period
in fiscal year 2013.
Adjusted EBITDA1 at $69,670, compared to $726,693 for the same period in fiscal year
Operating, selling and administrative expenses at 24.9% of revenues, up
compared to 18.4% for the same period in fiscal 2013.
Net loss of ($469,994), down compared to a net earnings of $269,696 for
the same period in fiscal 2013.
Operating activities generated $494,483 in net cash, compared to
$1,210,214 for the same period in fiscal 2013.
All amounts in Canadian dollars unless otherwise stated.
QUEBEC CITY, Nov. 12, 2013 /CNW Telbec/ - (TSXV: HEO) - H2O Innovation Inc. ("H2O Innovation" or the "Company") announces its results for the first
quarter of fiscal year 2014. During this quarter, the Company's
revenues decreased by 16.7% to $8.3 M, up from $9.98 M in the
comparable quarter of the previous fiscal year - generating a gross
profit of 25.8% compared to 24.7% in the first quarter of fiscal year
2013. The Company returned to positive adjusted EBITDA this quarter
after one quarter of negative adjusted EBITDA for the fourth quarter
ended June 30, 2013. "Throughout this fiscal year, we will continue to
strengthen the Company's business model established on the combination
of water treatment projects sales and recurring sales of specialty
chemicals and other consumables through the 2014 operating plan relying
on three pillars: quality, innovation and people", stated Frédéric Dugré, President and Chief Executive Officer of H2O Innovation.
Revenues for the first quarter of fiscal year 2014 totaled $8.3 M,
representing a $1.7 M or 16.7% decrease, as compared with revenues of
$9.9 M for the same quarter of fiscal year 2013. The decline is largely
attributable to revenues from projects which reached $5.1 M compared to
$7.0 M in the corresponding period of the previous fiscal year,
representing a 27.5% decrease. The decline is partly attributable to
the fact that 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. In addition, more than half of last year's comparable quarter
revenues came from three (3) projects in the oil & gas sector in
Western Canada, which were of bigger sizes than this quarter's
projects. From time to time, the nature of projects realized varies
depending on the sales backlog used.
The decrease of revenues has been softened by an increase of revenues
from sales of specialty chemicals and consumables which reached $3.2 M
in this quarter compared with $2.9 M in the comparable quarter of the
previous fiscal year, representing a 9.2% increase. These revenues are
recurring in nature. In the first quarter of fiscal year 2014, we have
added two new distributors to our sales who will now represent PWT
products and services in Brazil and Tunisia. In addition, our efforts
toward the expansion of our distribution network for products related
to maple syrup production have contributed to nearly 60% of the
increase of our revenues from specialty chemicals and consumables
during this quarter.
In this first quarter of fiscal year 2014, the Company was able to
generate a 25.8% gross profit, up from 24.7% in the first quarter of
fiscal year 2013. The revenue mix in this quarter shows that revenues
from specialty chemicals and consumables represent a higher proportion
of total revenues compared to the corresponding period of the previous
fiscal year (38.6% in fiscal year 2014 versus 29.4% in fiscal year
Selected financial data
ended on September 30,
Research and development expenses - net
Net earnings (loss)
Basic and diluted earnings (loss) per share
The Company secured $3.4 M in new bookings for water treatment projects
over the quarter. These new bookings, combined with the realized
revenues from water treatment projects during the quarter, have brought
down the backlog at $12.4 M as at September 30, 2013. The Company's
bookings over revenue ratio for projects have declined to 0.7 from 1.1
in the previous quarter. The current pipeline is still rich in
opportunities which should allow the Company's sales backlog to support
its revenue growth. We maintain strong bidding activities and
management efforts are aimed at growing the Company's sales backlog
The Company's ratio of selling, operating and administrative expenses
("SG&A") as a whole over revenues amounted to 24.9% for this quarter,
up from 18.4% 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 due to a higher level of SG&A expenses.
"We have begun this fiscal year by streamlining our research and
development activities into a more structured model to ensure that the
objectives included in our 2014 operating plan relying on three
pillars: Quality, Innovation and People are met" added Frédéric Dugré. Therefore, a new function has been identified in the Company's
statement of earnings to reflect the decisions made in this plan in
regards to innovation. Research and development expenses, net, totaled
$43,407 for the current quarter.
Adjusted EBITDA for the quarter was recorded at $69,670, compared with
$726,693 for the same period ended September 30, 2012. The lower
revenues recorded during the quarter compared with the corresponding
quarter of the previous fiscal year and the higher SG&A expenses also
contributed to generating negative adjusted EBITDA. The Company
returned to positive adjusted EBITDA this quarter after one quarter of
negative adjusted EBITDA for the fourth quarter ended June 30, 2013.
The net earnings (loss) was ($469,994 or ($0.008) per share for the
first quarter of fiscal 2013 compared with $269,696 or $0.004 per share
for the first quarter of fiscal 2013. This deterioration is primarily
due to lower revenues despite generating a higher gross profit of 25.2%
and to higher SG&A expenses.
Operating activities generated $494,483 in cash for the period ended
September 30, 2013, compared with $1,210,214 of cash generated during
the corresponding period ended September 30, 2012. The decline is
mainly attributable to the degradation in net loss in the first quarter
of fiscal year 2014 as compared with the corresponding period ended
September 30, 2012 and to the change in working capital items.
The first 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).
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 designs and provides state-of-the-art, custom-built, and
integrated water treatment solutions based on membrane filtration
technology to municipal, energy & natural resources end-users. H2O Innovation also provides a complete line of specialty chemicals and
consumables for membrane filtration and reverse osmosis systems. 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 and share of
(earnings) loss in a joint venture and stock-based compensation costs.
The definition of adjusted EBITDA used by the Company may differ from
those used by other companies.
SOURCE: H2O Innovation Inc.
For further information:
H2O Innovation Inc.