CALGARY, May 14 /CNW/ - Pure Technologies Ltd., TSX-V: PUR, announces
total revenues of $8,164,000 for the first quarter ended March 31, 2009 and
net income of $1,826,000.
Revenue and income, prior to the inclusion of other income and deduction
of taxes, were the highest ever for the first quarter for the Company,
demonstrating a growing market for its technologies and services.
There was continuing strong activity in the fibre-optic monitoring
business during the quarter, with systems delivered to San Diego County Water
Authority, San Francisco Public Utilities Department and the Great Man-Made
River (GMRA) Project. The San Francisco installation is the first for this
agency. Our consulting services business increased by 319% over last year,
primarily as a consequence of the contribution of Price Brothers (U.K.) Ltd.
(PBUK), acquired in May of last year. Recurring revenue continues to increase,
up 85% over last year as a result of an increase in the installed base of
monitoring systems. SmartBall activity should increase significantly as the
year progresses and as we complete large contracts in Australia and New
Orleans, complemented by other projects. Work on the Washington Suburban
Sanitary Commission contract commenced during the quarter and it is expected
that revenue from this project will be recognized throughout the year.
Working capital and cash positions remain strong and the Company remains
debt-free. Based on the current visibility, the Company anticipates that it
will be able to maintain a high rate of growth for the year, subject to some
quarterly volatility. This will be driven by sustained demand in the United
States, increased activity in the services sector, and contributions from new
international markets. We are planning to expand the range of premium
inspection and assessment services we offer to water and wastewater agencies
in the near future. These sectors offer significant sustainable growth
opportunities due to the increasing emphasis on buried infrastructure renewal
and loss reduction in water distribution systems worldwide.
Current confirmed backlog is in excess of $14.5 million. Pure has also
received verbal confirmation of projects in excess of $3.4 million which are
subject to the normal contract review process and final documentation. In
addition, annualized monitoring and technical support revenue under contract
is in excess of $4 million.
Overall, revenues have increased by 35% over the same period in 2008.
Equipment sales have shown an increase of 18%. Of note is the fact that 2009
equipment revenue was generated from several sources, reflecting the
increasing diversity of the Company's revenue base, whereas 2008 first quarter
revenue was generated primarily from the completion of phases 1 and 2 of the
Revenue from monitoring and technical support increased by 85% in the
quarter. With an increasing installed base of AFO systems, this revenue source
continues to improve each year. As well, the first quarter of 2009 includes
recognition of technical support for the GMRA contract that was awarded in
late 2007 whereas the first quarter of 2008 included only a smaller technical
support revenue component from previous GMRA contracts.
Gross margins were 70% compared to 67% in 2008. Above average margins
were realized for specialized equipment sales. Other product lines maintained
their target margins.
Marketing and promotion expenses for the quarter have increased by 53%
over 2008. Additional staff were added for the North American market in the
latter part of 2008 and early 2009 to service continuing growth in this
market. Increased presence in the international market is a major focus for
the Company in 2009. Initiatives include the establishment of a branch office
in Abu Dhabi and continuing SmartBall demonstrations in various countries for
water, wastewater and hydrocarbon applications.
Engineering and operations expenses have increased by 95% over 2008. As
revenue grows, the operations group will increase in order to support the
growth. In late 2007 and further in 2008, the operations group was expanded to
the offices located in the U.S. Historically, all projects were supported
through the Company's resources in Canada, but given the growth in the U.S.
market, this was no longer sustainable. In addition, the international market
has grown and further specialized resources are required to support that
General and administrative expenses for the quarter have increased 95%.
PBUK expenses account for 52% of the increase as the acquisition was completed
in the second quarter of 2008 with no corresponding amounts reflected in the
2008 first quarter results. The remaining 48% is a factor of the additional
resources added in 2008 subsequent to the first quarter and the streamlining
of some expenses on a monthly basis rather than as a year end accrual.
Research and development expenses for the quarter decreased by $108,288
from 2008. There was no capitalization of development costs in the quarter. In
2008, the Company was awarded a research grant through Arizona State
University, payments from which are netted against expenses. In 2008, the
payments were all deducted from the amounts capitalized, but since no costs
were capitalized in 2009, these payments were deducted from the research and
Depreciation and amortization for 2009 increased by 24% compared to the
first quarter of 2008. The rise in depreciation and amortization expense
reflects capitalization of development costs in 2008 as well as the
amortization of intangible assets on the acquisition of PBUK.
2009 Q1 Financial Highlights
Three months ended:
Consolidated Statement of March 31, March 31,
Operations 2009 2008
Equipment sales 5,441,000 4,609,000
Inspection services 642,000 660,000
Consulting services 1,215,000 290,000
Monitoring & technical support 866,000 469,000
Total revenue 8,164,000 6,028,000
Cost of sales 2,443,000 1,977,000
Marketing 1,068,000 698,000
Engineering and production 893,000 458,000
General and administrative 1,562,000 799,000
Research and development 233,000 341,000
Depreciation and amortization 316,000 254,000
Foreign exchange gain (141,000) (279,000)
Interest income (39,000) (125,000)
Income from continuing operations
before tax 1,829,000 1,905,000
Income taxes 3,000 -
Net income 1,826,000 1,905,000
Income per share
- basic $ 0.06 $ 0.06
- diluted $ 0.05 $ 0.06
Weighted avg. shares
- basic 32,961,396 32,148,177
- diluted 33,633,541 32,764,144
As at As at
(unaudited) Mar. 31, Dec. 31,
Consolidated Balance Sheet 2009 2008
Cash and cash equivalents $ 20,826,000 $ 20,204,000
Accounts receivable 9,482,000 7,458,000
Inventory 1,469,000 1,386,000
Prepaid expenses 683,000 848,000
Net investment in lease 89,000 87,000
Property and equipment 2,244,000 2,487,000
Goodwill 1,849,000 1,849,000
Intangible assets 1,690,000 1,754,000
Net investment in lease 112,000 131,000
Other assets - 28,000
$ 38,444,000 $ 36,232,000
Liabilities and Equity
Accounts payable $ 1,996,000 $ 2,266,000
Deposits on sales contracts 200,000 112,000
Future income taxes 184,000 196,000
Share capital 44,654,000 44,102,000
Contributed surplus 1,201,000 1,179,000
Accumulated other comprehensive loss (53,000) (59,000)
Deficit (9,738,000) (11,564,000)
$ 38,444,000 $ 36,232,000
About Pure Technologies Ltd.
Pure Technologies Ltd. is an international technology and services
company which has developed patented technologies for inspection, monitoring
and management of critical infrastructure around the world. Pure operates from
its headquarters in Calgary, Canada and through subsidiaries in Maryland, New
Jersey, and the UK. Pure's proprietary product portfolio includes
SoundPrint(R), a continuous acoustic structural monitoring system for
buildings, bridges and structures; SoundPrint(R) AFO, a fiber-optic
distributed acoustic sensing system for monitoring and surveillance of
pipelines; and SmartBall(R), a revolutionary new leak detection technology for
water, wastewater and hydrocarbon pipelines.
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
(R) Registered Trademarks, property of Pure Technologies Ltd.
"The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release"
For further information:
For further information: To find out more about Pure Technologies Ltd.
(TSX-V: PUR), visit our website at www.puretechnologiesltd.com; contact James
E. Paulson, Chairman or Karen Keebler, Chief Financial Officer, at (403)
266-6794, or e-mail to: firstname.lastname@example.org