Results for the three-month period ended March 31, 2013
Revenues of $9.9 million, a solid performance from $10.2 million for the
same period in fiscal year 2012.
Gross profit strong at 25.2%, compared to 26.4% for the same period in
fiscal year 2012.
Adjusted EBITDA1 at $530,026, stable compared to $563,603 for the same period in fiscal
Operating, selling and administrative expenses down by $195,000, at
20.0% of revenues, compared to 21.4% for the same period in fiscal year
Net earnings of $86,834, up compared to a net loss of ($7,651,400) for
the same period in fiscal year 2012.
Operating activities used ($1,073,407) in net cash, compared to
($419,247) used for the same period in fiscal year 2012.
Results for the nine-month period ended March 31, 2013
Revenues of $29.4 million, up by 20.6% from $24.3 million for the same
nine-month period in fiscal year 2012, a 20.6% organic growth.
Gross profit up at 25.3%, compared to 24.8% for the same nine-month
period in fiscal year 2012.
Adjusted EBITDA at $1,818,607, compared to $491,505 for the same
nine-month period in fiscal year 2012.
Operating, selling and administrative expenses down by $335,000, at
19.5% of revenues, compared to 24.9% for the same nine-month period in
fiscal year 2012.
Net earnings of $845,384, up compared to a net loss of ($8,954,127) for
the same nine-month period in fiscal year 2012.
Operating activities generated $1,160,757 in net cash, compared to
($744,717) used for the same nine-month period in fiscal year 2012.
All amounts in Canadian dollars unless otherwise stated.
Alternext: MNEMO: ALHEO
QUEBEC CITY, May 14, 2013 /CNW Telbec/ - (TSXV: HEO) - H2O Innovation Inc. ("H2O Innovation" or the "Company") announces its results for the third
quarter of fiscal year 2013 ended on March 31, 2013. For a fourth
consecutive quarter, the Company is profitable and is recording net
earnings of $86,834. "Our focus to maintain profitability while
increasing revenues is the result of continuous efforts in controlling
the level of expenses, improving our project execution, and expanding
into new markets. The initiatives undertook in the past years to
increase the level of consumables & services revenues combined with the
changes implemented since June 30, 2012 meant to enhance our operations
are finally paying-off. Today, our business model has been proven
viable. Any revenue increase impacts positively our operating earnings
as the fixed charges tends to remain the same, showing high scalability
potential in our business. Nevertheless, many challenges remain as we
continue to seek operational excellence in project execution and
further growth in targeted markets", stated Frédéric Dugré, President and Chief Executive Officer of H2O Innovation.
The Company's revenues are above the $9 M mark for a fifth consecutive
quarter. Revenues for the third quarter of fiscal year 2013 totaled
$9.9 M, representing 2.5% decrease, as compared with revenues of $10.2
M for the same quarter of fiscal year 2012. Revenues from projects
reached $5.9 M compared to $6.7 M in the corresponding period of the
previous fiscal year, representing an 11.8% decrease. Nearly 40% of
these $5.9 M revenues come from three projects in the oil & gas sector
in Western Canada and nearly 20% come from municipal projects in the
Revenues from sales of specialty chemicals and consumables increased by
$0.5 M for this quarter, reaching $4.0 M compared with $3.5 M in the
comparable quarter in fiscal year 2012, representing a 15.5% growth.
The maple syrup production season has reached its peak during this
third quarter, which boosted our sales of consumables by approximately
20%. The Company also started to provide operation assistance services
for a drinking water production unit and a wastewater plant in Northern
Alberta. Since June 30, 2012, 11 out of 13 projects delivered and
commissioned have integrated our specialty chemicals and consumables or
are using our service program for their system operations. "These 11
projects represent a conversion rate of 84.6%, which clearly reflects
the impact of a better integrated approach in our business model
allowing us to grow, strengthen and retain our customer relationships
over years to come", added Frédéric Dugré.
The Company generated net earnings of $86,834 or $0.001 per share
compared to a net loss of ($7,951,400) or ($0.127 per share) for the
same period in fiscal year 2012. This improvement is attributable to
three main factors. First, the Company maintained a high level of
revenues, which generated satisfying gross profit margin. Second,
management closely monitors the SG&A and is diligent in finding
additional savings. Finally, the Company did not suffer from a goodwill
impairment charge, an impairment of intangible assets and changes in
fair value of contingent considerations in the third quarter of fiscal
year 2013 compared to the third quarter of fiscal year 2012.
Selected financial data
ended on March 31,
ended on March 31,
Net earnings (loss)
Basic and diluted earnings (loss) per share
The Company secured $2.6 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 $15.4 M as at March 31, 2013. "Many opportunities
in both territories and applications are composing the Company's sales
pipeline; we maintain strong bidding activities and management efforts
are aimed at growing the Company's sales backlog above the $20 M mark
before our year-end", stated Frédéric Dugré. These efforts include the strategic hiring of David Faber as Director
of Systems Sales USA, who has already taken the lead of the U.S.
systems sales and the hiring of a sales manager based in British
Columbia to develop a sales network and promote our products and
services in Western Canada.
The Company's ratio of selling, operating and administrative expenses
("SG&A") as a whole over revenues amounted to 20.0% for this quarter,
down from 21.4% for the corresponding quarter of the previous fiscal
year. The improvement of this ratio is partly the result of the
important reorganization initiated since June 30, 2012. We were able to
maintain the volume of business during this third quarter of fiscal
year 2013 and our efforts show the benefit and scalability of our
business model. Overall, the Company's SG&A expenses show a decrease of
approximately $195,000 compared to the corresponding quarter of fiscal
Adjusted EBITDA for the quarter was recorded at $530,026, or 5.3% of
revenues, compared with $563,603, or 5.5% of revenues, for the same
period ended March 31, 2012. While the level of revenues decreased from
$10.2 M to $9.9 M and the gross profit declined from 26.4% to 25.2%
during the third quarter of fiscal year 2013 compared with the period
ended March 31, 2012, the reduction of SG&A expenses was sufficient to
maintain a positive adjusted EBITDA above the $0.5 M mark.
Operating activities used ($1,073,407) in cash for the period ended
March 31, 2013, compared with ($419,247) of cash used during the
corresponding period ended March 31, 2012. The decline is mainly
attributable to the negative change in working capital items, which
effect has been offset by the improvement in net earnings in the third
quarter of fiscal year 2013 as compared with the corresponding period
ended March 31, 2012. "We anticipate an improvement in the working
capital items during the next quarter because of the expected
milestones to be reached within invoicing and manufacturing
activities", stated Frédéric Dugré.
Over the nine-month period ended March 31, 2013, the Company's revenues
totaled $29.4 M, compared to $24.3 M for the corresponding period ended
March 31, 2012, showing a solid organic growth of 20.6%. During this
same period the Company recorded net earnings amounting to $845,384 and
a positive adjusted EBITDA of $1,818,607, compared to a net loss of
($8,954,127) and an adjusted EBITDA of $491,505 for the corresponding
period of fiscal year 2012. For the nine-month period ended March 31,
2013, the Company generated $1,160,757 of cash flows from its operating
activities, compared to ($744,717) used by its operating activities for
the corresponding period of fiscal year 2012.
The third 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 25,
2012 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
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, stock-based
compensation costs, gain on settlement agreement, and share of
(earnings) loss in a joint venture. 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.